Efficiency of commercial banks operating in Federation of Bosnia and Herzegovina using DEA method

Abstract

The main objective of this research is to measure the efficiency of commercial banks operating in the Federation of Bosnia and Herzegovina in the period 2016-2017. An analysis is conducted of over 12 banks that had positive overall profit lost at the end of 2016 and 2017 years published by the Banking Agency of Federation of Bosnia and Herzegovina. Data Envelopment Analysis (DEA) method with two input and three output parameters is used for efficiency measurement. Each bank’s efficiency is presented for the 2016 and 2017 years. For an observed period, large banks showed more efficiency than small banks. Based on the results shown in this research and features used in this model there is a significant difference in the relative efficiency of the top two banks and the rest of the 10 banks.