Measuring Bank Branch Performance in Pakistan: Data Envelopment Analysis (DEA)

This study provides comparative analysis of different banks branches efficiency in Pakistan during the year 2010. The main objective of the study is to develop an effective model for measuring the relative efficiency and achievable development proficiency of selected bank branches by analyzing their competencies and deficiencies through application of Data Envelopment Analysis. Further more, this study is to measure the production and profitability features of bank branches and examine that how the scale efficiency is determined by size of selected branches. The results of the study indicates that after estimation of efficiency under constant returns to scale, two banks are comparatively efficient and eight banks are comparatively less efficient. The less efficient banks have need to improve their overall system i.e., well equipped technological system and best utilization of all input resources in order to meet the challenging environment and their competitors.