Study On The Evaluation Of Efficiencies Of Listed Commercial Banks In China

Commercial banks are an indispensable subject in the economic and social operation process.Whether banks operate efficiently or not affects their own developments and financial activities of other subjects.Therefore,how to measure the bank efficiency scientifically is of great significance.Many commercial banks in China have gone public already.These banks have large scales and have operated for a long time.Their business scope is relatively wide and they have a big influence on the public.So they can act as the representatives of commercial banks in China.To ensure the availability of data and the accuracy of the conclusion,this paper aims to measure the efficiency of 16 commercial banks from 2010 to 2015 and find ways to improve bank efficiency.Researches of this paper include two parts: the selection of evaluating indicators and the evaluation of efficiencies of banks.To acquire correct indicators,firstly this paper selected 6 inputs and 6 outputs.Then an input and an output are removed creatively by using CCA.Later on,CCA is used towards the rest 5 inputs and 5 outputs,and 5 sets of canonical variables are acquired.This paper selected the former 2 sets of canonical variables as the final comprehensive inputs and comprehensive outputs to evaluate bank efficiency.To evaluate efficiencies of banks,DEA is used to calculate technical efficiencies,cross efficiencies and Malmquist indexes.First,CCR model is used to calculate technical efficiencies with comprehensive inputs and comprehensive outputs,and the result shows that difference of technical efficiencies between banks are small.Second,cross efficiency model is used to secure technical efficiencies which are more objective.Evidently,there is a great difference between the results from cross efficiency model and CCR model.According to cross efficiencies,joint-stock banks ranks first,city commercial bank ranks second,and state-owned banks ranks third.In the end,cross efficiencies are used to calculate Malmquist indexes of banks in different periods,and Malmquist indexes are broken down into technical efficiency changes and technical changes.Judging from Malmquist index,total factor productivities of more than half of banks have increased.Judging from technical efficiency changes,the number of banks whose technical efficiency change is less than 1 exceeds the number of banks whose technical efficiency change is more than 1,which means the operation and management capacities have declined in most cases.Judging from technical changes,it is obvious that banks whose technical changes is less than 1 in 2010-2011 is fewer,and there are more banks whose technical change is more than 1 in 2011-2015,which indicates that many banks achieved technological progress or innovation since 2011.Besides,the trend of Malmquist indexes and technical changes is the same,which implies that the Malmquist indexes of these 16 banks are mainly determined by their technical changes.In the end,this paper gives advice towards banks of different natures.State-owned banks and stock-joint banks should improve the management level,and city commercial banks should improve the ability of financial innovation and the management level.