Selected paper

Černohorská, Liběna
The Efficiency of Selected Banking Sectors in the European Union
Year: 2017
Volume: 8
Issue: 1
Pages: 5-18
JEL: G14, G21, C38
DOI: 10.5817/FAI2017-1-1

PDF

Keywords:
bank, banking sector, banks efficiency, cluster analysis, principal component analysis

Abstract:
When measuring bank efficiency, there is no generally accepted concept of efficiency nor is there a uniform system of indicators for its measurement. It is, however, possible to use the method of financial analysis to measure bank efficiency. In this paper, the following ratios are used for measuring bank efficiency: ROA, ROE, total assets, nonperforming loans/total loans, quick liquid assets/total assets, quick liquid assets/short-term liabilities, loans/deposits, and capital adequacy. The goal of this paper is to assess the efficiency of Czech banks using cluster analysis on the basis of selected ratios and to conduct a comparison with bank efficiency in Poland, Austria, Greece, Portugal, France, and Slovakia. The collective ratios for the entire banking sector will be compared for the selected countries for the years 2010–2013. Cluster analysis demonstrates that the Czech banking sector is the most similar to the Slovakian sector. According to a combination of selected ratios, it is possible to designate the cluster composed of the Czech and Slovak banking sectors as being the cluster with the highest banking sector efficiency. It differs extensively from the cluster of Greece and Portugal.

References:

Altunbas, Y. and Chakravarty, S. P. (1998). Efficiency measures and the banking structure in Europe. Economics Letters, 60(2), pp. 205-208. Atemkeng, T. and Nzongang, J. (2006). Market structure and profitability performance in the banking industry of CFA Countries: the case of commercial banks in Cameroon. Journal of Sustainable Development in Africa, 8(2), pp. 1-14. Abbasoglu, O. F., Aysan, A. F. and Günes, A. (2007). Concentration, competition, efficiency and profitability of the Turkish banking sector in the post-crises period. Banks and Bank Systems, 2(3), pp. 106. Bankscope. (2014). World banking information source. Bureau van Dijk. Berger, A. N., Hancock, D. and Humphrey, D. B. (1993). Bank efficiency derived from the profit function. Journal of Banking & Finance, 17(2), pp. 317-347. Bonin, J. P., Hasan, I. and Wachtel, P. (2005). Bank performance, efficiency and ownership in transition countries. Journal of Banking & Finance, 29(1), pp. 31-53. Černohorský, J. (2014). The Integration of Credit Markets. In Proceedings of 7th International Scientific Conference on Managing and Modelling of Financial Risks, Ostrava: VŠB-TU Ostrava, pp. 127–135. Černohorský, J. and Prokop, V. (2016). The Relationship of Concentration and Profitability in Banking Markets. In Proceedings 15th International Conference on Finance and Banking, Karviná: Silesian University, pp.40-49. Dabla-Norris, E. and Floerkemeier, H. (2007). Bank efficiency and market structure: what determines banking spreads in Armenia? IMF Working Papers, pp. 1-28. Friedman, J., Hastie, T. and Tibshirani, R. (2001). The elements of statistical learning, 1st ed. Berlin: Springer series in statistics. Fuentes, R. and Vergara, M. (2003). Explaining bank efficiency: bank size or ownership structure? In Proceedings of the VIII Meeting of the Research Network of Central Banks of the Americas, pp. 12-14. Groeneveld, J. M. and de Vries, B. (2009). European co-operative banks: first lessons of the subprime crisis. The International Journal of Cooperative Management, 4(2), pp. 8-21. Hedvičáková, M. and Svobodová, L. (2015). Analysis of Banking Fees and Clients´Needs. In Proceedings of the 12th International Scientific Conference on European Financial Systems 2015, Brno: Masaryk University, pp. 181-188. Klímek, P. (2005). Data mining a jeho využití. E+M Ekonomie a Management, 8 (3), pp. 128 - 135. Mester, L. J. (1993). Efficiency in the savings and loan industry. Journal of Banking & Finance, 17(2), pp. 267-286. Molyneux, P. and Thornton, J. (1992). Determinants of European bank profitability: A note. Journal of Banking & Finance, 16(6), pp. 1173-1178. Polouček, S., et al. (2006). Bankovnictví. Praha: CH Beck. Richard, P. J., Devinney, T. M., Yip, G. S. and Johnson, G. (2009). Measuring organizational performance: Towards methodological best practice. Journal of management, 35(3), pp. 718-804. Romesburg, Ch. (2004). Cluster Analysis for Researchers. North Carolina: Lulu Press. Stavárek, D. and Řepková, I. (2013). Efficiency in the Czech banking industry: A non-parametric approach. Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, 60(2), pp. 357-366. Serdarevic, G. and Teplý, P. (2011). The Efficiency of EU Merger Control during the Period 1990-2008*. Finance a Uver, 61(3), pp. 252-276. Svobodová, L. (2013). Trends in the number of bankruptcies in the Czech Republic. In Proceedings of International Conference, Hradec economics days 2013, Hradec Králové: Univerzita Hradec Králové, pp. 393-399. Tokarčíková, E., Ponisciakova, O. and Litvaj, I. (2014). Key Performance Indicators and their Exploitation in Decision-Making Process. In Proceedings of 18th International Conference. Transport means 2014, Kaunas: Kaunas University of Technology, pp. 372-375. Tulkens, H. (2006). On FDH efficiency analysis: some methodological issues and applications to retail banking, courts and urban transit. In Public goods, environmental externalities and fiscal competition, pp. 311-342. Vodová, P. (2013). Liquid Assets in Banking: What Matters in the Visegrad Countries? E+M Eonomics and Management, 16(3), pp. 113-129. Zou, H., Hastie, T. and Tibshirani, R. (2006). Sparse principal component analysis. In Journal of Computational and Graphical Statistics. 15(2), pp. 265-28.

Call for papers

Call for papers is permanently open for articles across all the research areas.

tel.: +420 549 494 683 | e-mail: fai@econ.muni.cz
© Copyright 2010–13 IFT