Efficiency of Commercial Banks in Sudan: DEA Approach

Abdelgadir Mohamed Ahmed Abdalla, Hamad Omer Mohamed Tahir

Abstract


This paper attempts to measure the extent of technical،puretechnical and scale efficiencies of Sudanese banking industry using thenon-parametric technique of data envelopment analysis. A sample of 29banks operating in Sudan during 2009 and 2010 was used. The inputs ofthe model include administrative expenses،deposits and assets،while theoutputs include profit،loans and assets. The empirical results show that،on average،only 4 banks of the 29 domestic banks operating in thefinancial years 2009 and 2010 are found to enjoy overall technicalefficiency and 4 banks display pure technical efficiency but fall short ofscale efficiency. The remaining 2 banks are relatively inefficient. Thetechnical efficiency scores range from 0.533 to 1،with an average of0.84. The results indicate that managerial inefficiency is the main sourceof overall technical inefficiency in Sudanese domestic banking industry.

Keywords


Technical Effi ciency ;Data envelopment ;analysis (DEA) ;Sudanese banks ;Returns - to - scale

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