•  
  •  
 

Bullion

Keywords

Technical efficiency, Data development analysis, Banking system, Deposit money banks

Abstract

This paper examines the technical efficiency of deposit money banks (DMBS') in Nigeria. Measures of technical efficiency are derived in the Nigerian deposit money banks (DMBS') by implementing non-parametric, data envelopment analysis technique on a cross section of 24 banks taken from 2007 to 2013. The efficiency concepts, measurement and methodology were discussed. The existence of technical efficiency is established. The result suggests that the sources of overall technical inefficiency, the observed issues are due to poor input utilization (managerial inefficiency) and failure to operate almost productive scale size. Therefore, in this research the paper suggests or considers some important factors which may exert on influence on the overall technical efficiency of a bank. This includes larger profit levels, market share, and exposure to off-balance sheet activities may hove positive result on the overall technical efficiency. On the other hand, poor assets quality (i.e., larger volume of Non-performing Asset in relation to total assets) has negative consequences on the overall technical efficiency of the bank. Examination of these factors would help placed banks' efficiency better.

Author Bio

The author is a staff of Research Department, Central Bank of Nigeria.

Publication Title

CBN Bullion

Issue

2 - 4

Volume

38

Download
COinS
 
 

To view the content in your browser, please download Adobe Reader or, alternately,
you may Download the file to your hard drive.

NOTE: The latest versions of Adobe Reader do not support viewing PDF files within Firefox on Mac OS and if you are using a modern (Intel) Mac, there is no official plugin for viewing PDF files within the browser window.