Efficiency Analysis of Česká spořitelna, a.s. Branches Using Data Envelopment Analysis Models

Maintaining a branch network represents a significant part of bank's costs and therefore each banking network with a large number of branches will focus over time on the efficiency of individual branches. Traditionally, efficiency analysis is performed using ratios. However, modern approaches make it possible to use more sophisticated models for analysis such as data envelopment analysis (DEA) models, which allow to evaluate the branch more comprehensively and cover more criteria of its performance. The advantage of DEA models is that they allow several diverse inputs and outputs to be included in the analysis without the need to explicitly specify the relationship between them. The thesis deals with the evaluation of the branch network efficiency of Česká spořitelna, a.s. using data envelopment analysis models. Based on a search of previous studies, three types of efficiency are chosen, which are production, profit and transaction efficiency. They are evaluated for each of the 393 bank branches in the period 2019–2021. In order to adapt the analysis to the needs of the bank as much as possible, some modifications of the basic models are used, such as Tone's modified SBM model or models with desirable inputs and uncontrollable outputs. The theoretical part therefore deals with both the description of the theoretical basis of DEA models and the methodology of the mentioned basic models modifications. The theoretical part also describes the frequently used approaches for evaluating the efficiency of the branch network and some previously conducted studies dealing with this issue. In the practical part, the chosen approaches are introduced and the choice of data is justified. Furthermore, the analysis of the branch network efficiency is performed including the evaluation of the obtained results and development over time. The relationship between the obtained efficiency rates and client satisfaction is also analysed as well as the sources of inefficiency. For the needs of the bank this work includes the MS Excel data file with all the results of the analysis including individual efficiency measures for all branches. For inefficient branches the data file includes proposals of necessary measures to improve efficiency. To solve mathematical models LINGO optimalization software was used.