Efficiency in some Nordic bank groups: An efficiency analysis of some commercial bank groups in theNordic banking industry 2008 to 2017
2020 (English)Independent thesis Basic level (degree of Bachelor), 10 credits / 15 HE credits
Student thesis
Abstract [en]
This research investigates the efficiency of five commercial bank groups located in the Nordic banking industry for the years 2008 to 2017. Efficiency is an important and fundamental concept in microeconomics and how well the conversion works from input to output is good to know for all the stakeholders in a firm. To evaluate the efficiency is Data Envelopment Analysis used which is a non-parametric method based on mathematical programming. The generated results show the relative efficiency score one for the efficient bank groups and a number between one and zero for the inefficient bank groups. Further on is this research using a ranking method to rank the efficientbank groups and finally are the inefficient bank groups suggested with the improvements needed to become full efficient. The data were collected from the bank groups annual reports from every year. The main results were generated by a linear maximizing problem and further could the ranking bedone and by the values from the shadow prices could the improvements be calculated. The results show that the relative efficiency differs among the five bank groups and some bank groups develop for the better over the years while some lose efficiency relative to the others over the years. One bank group retains its efficiency score one over all the studied years but this bank group are on the other hand ranked as number two for all the years with exception for one year. Regarding to this research are some bank groups larger than other and the ranking reveals further that both the smallerand the larger bank groups became efficient during the years, one cannot conclude that the larger are more efficient according to this research. Finally, there is no homogeneity in the advice for the inefficient bank groups, but the results indicate that the focus should be on adjusting their inputs to become efficient, in this case the interest expenses and the labor costs.
Place, publisher, year, edition, pages
2020. , p. 42
Keywords [en]
Bank efficiency, data envelopment analysis, DEA, decision making units, Nordic banks, Nordic banking industry, reference DMU, efficiency ranking, relative efficiency
National Category
Economics
Identifiers
URN: urn:nbn:se:miun:diva-40621OAI: oai:DiVA.org:miun-40621DiVA, id: diva2:1504345
Subject / course
Economics NA1
Supervisors
Examiners
2020-11-272020-11-272020-11-27Bibliographically approved