Postal Savings Bank Of China Ningbo Branch Outlets Efficiency Study

During the 12 th Five-Year Plan period,the booming of China Banking Industry was a result of good internal and external economic development and national policy support from central government.However,in the next 13 th Five-Year Plan period,Banking Industry will face dramatic changes in economic and policy environment internally as well as externally.Postal Savings Bank of China,as the fifth largest bank nationallye in total assets,has positioned itself as large retail commercial bank.Ningbo branch,one of the 36 first level branches,will face more challenges but also opportunities in its expansion of outlet retail business.Because of interest rate marketization,financial disintermediation and internet finance,traditional retail business of Ningbo branch and outlets' counter services capability have been declining overtime.Therefore the efficiency analysis to services and business abilities of all Ningbo branch's outlets will provide evidence that can support sustainable growth.This paper reviewed considerable amount of domestic and international literatures,then adopted BCC model from Data Envelopment Analysis to analyze the area and personal efficiency and operational efficiency to all 62 outlets of Ningbo branch based on year 2015 data.In addition to the quantitative analysis,this paper also provided recommendations that can improve outlet efficiency to support future growth.In the consideration of outlets reality,outlets total business areas and total number of staff are used as input variables at first stage,number of outlet counters and self-service machines are the output variables at first stage;the second stage uses number of outlet counters and self-service machines from first stage and operational cost as its inputs,whilst outputs are revenues,total saving balance,outlet counter turnovers and self-service terminal turnovers.The quantitative method uses DEA_Solver 5.0 to compute two stages efficiency rates for all 62 outlets.The conclusion of this study is based on the quantitative results from above method together with the economic environment,banking industry transformation and upgrade,as well as the outlet expansion deficiency of Ningbo branch.There are certain number of outlets having the situation of larger business area but less efficient in usage;some other outlets have invested significant amount of resources but resulted inefficient outputs in terms of revenues,savings,turnovers,etc.Regarding the above two existing problems,this paper proposed following strategic implementations that can improve operation efficiency.1.Effectively control resources input,then to reduce amount of investment;2.Effectively rectify business categories,to attract more customers with more professional and diversified services;3.Rectify service processes,to attract more customers with more convenient but higher quality services;4.Merge or relocate less efficient outlets,to serve customers with more convenient locations.Banking industry will need to develop in a fast pace to prepare for the challenges,especially the traditional outlet business,it require higher level of transformation and improvement.This paper used a combination of qualitative and quantitative methods to analyze efficiency rates across a range of measures for all outlets from Ningbo branch,the methodology and conclusions would be a good reference for outlets efficiency improvement in future.