Research On The Commercial Banks’Efficiency Based On Data Envelopment Analysis

Efficiency is one of the core problems that the economics deals with. It is also the goal that commercial banks chase in their business administration. Compared with speed and extensive operation, efficiency is a more profound issue. In the long term, the development of the banking industry depends not on speed but on efficiency. The efficiency of commercial banks aims at minimizing the input and maximizing the output That is to say economizing the cost input farthest or Promoting the maximization of returns. Jiangsu Province is one of the great economic province in China, it’s necessary to improve the bank efficiency to ensure the economy develop in a sustained and steady manner. Consequently, it is very meaningful to do research on the efficiency of Jiangsu Agricultural Bank.The paper compares the advantage and disadvantage of two kinds of approaches of measuring bank efficiency on the basis of conclusion of foreign and domestic research documents. The paper uses the DEA approach to measure the technology efficiency, pure technology efficiency and scale efficiency of13branches of Jiangsu Agricultural Bank from2006to2008.The comparison among the13branches, and the multiplied index comparison in one branch let us have a general view over the management efficiency of every branch and the difference between the factual value and the theoretical value. After measuring the efficiency of the13branches of Jiangsu Agricultural Bank, the econometrics model is put forward and we confirm that independent variables that the loan quality, the scale of bank assets, the proportion of the income of banks’middle product, the yield of assets, the quality of the staff.At last, according to the result, some advices for the reformation of Jiangsu Agricultural Bank are presented. The advices are:adjusting bank’s business process: developing middle product and promoting financial innovation; speeding up the technology innovation and progress; strengthening the staffs management; improving the assets’ quality, and so on.