Identifying the Effective Factors in Bank Efficiency Systematically by Data Envelopment Analysis: a Case Study of Refah-Kargaran Bank in Lorestan Province

One of the factors that makes the advanced countries more successful, is attending to the efficiency of economic units, especially banks. In this regard, the bank managers are required to respond appropriately to the questions asked about the banks’ efficiency which is practically impossible without evaluating the efficiency of the branches under their supervision. In most previous studies data envelopment analysis was used for evaluating the efficiency of bank branches. Using many efficiency indicators for this evaluation decrease the differentiation power and, as a result, increase the number of efficient branches. Taking a systematic view into consideration, in this study, a step-by-step method was developed for selecting the effective factors in the efficiency of different branches of one of the Iranian Banks based on the effect of each factor or indicator on the whole system’s efficiency including the banks under investigation. To this end, a new method was proposed for the evaluation of system’s efficiency and some of its properties were stated. This case study indicated that two indicators including, the number of personnel and the mean of resources were the most important factors in the efficiency of Refah Bank in Lorestan province.