Bank’s Efficiency In Cemac Zone

This study attempts to evaluate the efficiency of twelve commercial banks in CEMAC zone and find out the determinants of those banks’efficiency during the period2007-2010. To achieve this goal, the non parametric method which is the Data Envelopment Analysis is used to estimate the banks efficiency score, the Malmquist total factor productivity index is used to evaluate the productivity change inside the banks and the parametric method is used to find out if an econometric relation between the total factor productivity, total asset, the return on average equity, and bank’s efficiency exist. We also used the R-square to evaluate the percentage of the influence of explanatory variables on the dependent variable.Earlier we examined the CEMAC banking system giving their structure, and their legal and quotation system. We also look at bank’s efficiency from a global point of view, by presenting the intermediation, the production and the modern approaches as the three ways to evaluate the bank’s efficiency.The results suggest that, the CEMAC banks display an average efficiency score of about64.89%, so today they remain inefficient, assuming variable return to scale model. The decomposition of Malmquist total factor productivity index shows that, CEMAC banks are enjoying a productivity growth of about7.12%, this total factor productivity growth is as a result of catch-up effect of non best practice banks (+46.15%).The findings on the determinants of bank’s efficiency show that, the total factor productivity acts positively and appear to be significant on CEMAC banks’efficiency, while the total asset and return on average equity act negatively and appear insignificant on CEMAC banks’ efficiency. Focusing on the R-square, the findings suggest that36.6%of change in the CEMAC Banks’ efficiency resulted from the total factor productivity, the return on average equity and the total amount of the banks’asset. Most of the changing comes from the total factor productivity which is about33.72%holding all other variables constant.