| This research examines the intermediation efficiency of the retail branch network of one of Canada's five largest banks using the deposit and loan levels generated by the branches and their levels of bad loans, and at the same time incorporating data on the business environment in which they operate. Three DEA models are proposed, the first aims to maximize loan quality by minimizing the levels of bad loans produced, the second seeks to maximize the levels of deposits and loans generated, while the third also maximizes the level of potential business that could be generated, but with no regard to loan quality. The results obtained from the DEA models are further broken down into market segments and geographical regions. It is concluded from the results that a smaller number of DMUs will generally lead to a higher percentage of efficient DMUs and higher average efficiency scores. |
