Efficiency analysis of Serbian banking sector using data envelopment analysis: pre-pandemic era

Abstract

During the last decade, the question of measuring efficiency became inevitable factor of successful management of banks. Therefore, the basic goal of this paper is to apply DEA - Data Envelopment Analysis in comparing unit efficiency of Serbian banking sector for three years period of time (2017, 2018 and 2019). DEA is a technique of mathematical programming which uses analysis and comparation of efficiency of different entities and it is suitable to solve problems of different number and nature of inputs and outputs. The presented paper employs an output-oriented data envelopment analysis with a constant return to scale assumption. The selected input variables are total assets and total capital, while net operating income and net profit were used as output variables. Results showed that the average efficiency of Serbian banking sector is about 50% in the observed years. Opportunity Bank achieved the maximal efficiency score in the entire time period while Mirabank had the lowest efficiency score.

Keywords

• data envelopment analysis
• efficiency
• data envelopment analysis