Abstract
The
paper seeks to measure and compare the performance of state-owned commercial banks,
conventional private commercial banks and Islamic commercial banks operating in
Bangladesh during 2009-2014 using the Data Envelopment Analysis (DEA). It uses
a sample of 19 commercial banks comprising four state-owned banks, ten
conventional private commercial banks and five Islamic commercial banks. The
paper shows that the average technical efficiency scores of state-owned banks,
conventional private banks and Islamic banks are 0.8592, 0.9419 and 0.9569 respectively.
This means that state-owned banks experience highest inefficiency of 14.08%
followed by conventional private commercial banks (5.81%) and Islamic banks
(4.42%). It is also found that state-owned banks and Islamic banks face
technical inefficiency due mainly to scale inefficiency while technical
inefficiency of conventional private commercial banks is attributed mainly to
pure technical inefficiency. The efficiency results suggest that state-owned commercial
banks and Islamic banks need to improve their technical by enhancing scale
efficiency. Conventional private banks may improve their technical efficiency
by upgrading managerial performance.
JEL
Classifications Numbers: C14, C61, G21
Keywords: Efficiency,
Data Envelopment Analysis, Commercial
Banks, Bangladesh.