ASSESSMENT OF BANK EFFICIENCY IN SERBIA THROUGH THE UTILIZATION OF THE DEA SUPER-RADIAL MODEL
ASSESSMENT OF BANK EFFICIENCY IN SERBIA THROUGH THE UTILIZATION OF THE DEA SUPER-RADIAL MODEL

Summary/Abstract: Investigating factors affecting bank efficiency poses substantial challenges, particularly when employing the Data Envelopment Analysis (DEA) approach. With this in consideration, the paper analyses the bank efficiency in Serbia utilizing the DEA Super-Radial model. The empirical findings shed light on the inefficiency prevalent across all banks in Serbia, as indicated by the Super-CCR-I and Super-CCR-O models. Notably, based on Super-BCC-I model, only one bank, Banca Intesa, demonstrates efficiency, while the Super-BCC-O model identifies three efficient banks: API bank, Bank of China Serbia, and Mirabank. Conversely, the remaining banks exhibit inefficiency. Bank efficiency in Serbia is influenced by numerous macro and micro determinants. The Covid-19 pandemic, among other factors, has significantly impacted the efficiency of banks in Serbia by precipitating a decline in economic and credit activities. Moreover, the escalation in inflation rates and interest rates has exerted a notable influence, attributable to the pervasive political and energy crisis experienced on a global scale. To enhance bank efficiency in future, effective management of resources (such as employee count, assets, and capital), sales, and profit is imperative. Additionally, the digitalization of the entire business process assumes a crucial role in this endeavour.

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