Performance Evaluation Of Commercial Banks Based On The Factor Of E-banking

E-banking rose in china during 1990’, a little later than that of advanced countries in the world. And in recent years, customer’s building up preference of E-banking, as well as social increasing acceptance of it, speed up the development of electronic banking in our country. E-banking has being attracting more and more users with advantages such as convenience, economy and multifunction. Especially in the last two or three years, because of the well overall macro-economic in China, the Chinese banking continued to heat up, which led to the rapid popularization and development of e-banking. According to the statistics of commercial banks in China, internet banking has reached more than 30 percent on the replacement rate for the counter operation. E-banking, with its features of low-cost and high-efficiency, has attracted more and more attention and investment form commercial banks.At present, foreign articles about electronic bank performance evaluation are rare. And all papers at home assessing performance of the commercial banks did not take into consideration factors of e-banking. With the rapid development of electronic banking, domestic banking business started to tilt to the electronic banking, which is playing more and more important role in financial industry. In this paper, the innovation lies in that the factor of E-banking is considered into the performance evaluation system of banks, as an input variable in the model. And domestic research has not yet been involved in this factor.On the basis of the knowledge of China’s e-banking and the DEA model principle, this paper evaluate the performance of the domestic commercial banks, combined with factors of e-banking. Taking into account the availability and longitudinal comparability of sample data and other reasons, this paper chooses Bank of China, Agricultural Bank of China, Industrial and Commercial Bank of China, China Construction Bank, Bank of Communications-five state-owned banks, as well as Citic Industrial Bank, Minsheng Bank, China Merchants Bank, Shanghai Pudong Development Bank-four joint-stock banks as Samples from 2005 to 2007. Learning from other related professional literature, combined with the characteristics of E-banking, this paper establishes the evaluation model index system, including:total assets of banks, the number of bank cards, the number of bank employees, volume of e-banking transactions and bank profits, making the first four indices as input variables, bank profits as the output variable. Then this paper use DEA model to analyze the above-mentioned indicators, calculate the efficiency coefficient of each bank, and finally obtain the following conclusions:Firstly, average efficiency coefficient of domestic commercial banks is low in 2005. But during 2005 to 2007, overall business performance of all banks is in a rising trend, especially for joint-stock commercial banks, which was greatly developed in 2006 and 2007, even better than that of the state-owned banks. Bank of China and Shanghai Pudong Development Bank have had the DEA effective performance for three consecutive years, reflecting the stability and efficiency of their operating performance. And the Agricultural Bank of China have had the low return rates of assets and Per capita rate of return. Because of its low utilization rate of assets and personnel, ABC ostensibly gets staff redundancy and excess resources in statistical results.Judging from the scale efficiency, state-owned commercial banks are generally at the stage of decreasing returns to scale, and joint-stock commercial banks are generally at the stage of increasing returns to scale, which is delimited obviously. From statistical data of 2006 and 2007, whether or not taking into account the factors of electronic banking doesn’t affect the performance of commercial banks. Currently, e-banking industry in China doesn’t profit the commercial bank well. And almost for each bank, their inputs are more than ever, which is consistent with their stage of electronic banking development.This paper has five sections, the first section is introduction. The second, third and fourth sections are the main part of the paper, the fifth section is summary and suggestion. The detail of every section is following:Section one is introduction. This section briefly introduces the background and significance of this paper, the present situation and future trend of researches in this area, then shows this paper’s structural arrangements.Section two is the general statement of the development of E-banking in our country. In recent years, E-banking thrived quickly and there is still broad area for development, obviously, it will play a more important area in the future. So in this paper, E-banking was considered as a key factor in performance evaluation.Section three is the introduction of DEA model, including its advantage, the reason that we use it in this paper, and the way it is used. This section will take C2R and BC2 as examples.Section four is the main part of this paper. Decision-making unit system and evaluation index system is set up in this section. Moreover, this section carries on performance evaluation with DEA model and analyzes the results.The last section summarizes the paper as a whole, and gives some suggestions according to the results, then points out the weak points of this paper.