Bank performance in Middle East

• Main Author: Colesnic, Olga
• Other Authors: Κουνετάς, Κωνσταντίνος
• Format: Thesis
• Language: English
• Published: 2018
• Subjects: Bank efficiency; Non performing loans; DEA; Directional distance function; Αποτελεσματικότητα τραπεζών; Μη εξυπηρετούμενα δάνεια; 332.106 81

The aim of at the hand dissertation is two-fold. Firstly, it attempts to analyse the effect of risk on bank's efficiency levels. Secondly, it seeks to determine the influence of bank size taking into consideration the possible inefficiency originated to risk abatement cost. The accomplishment of the study's intentions relay on DEA estimations of efficiency, resulted from an output orientated directional distance function with weak and strong disposability of nonperforming loans calculated with respect to both heterogenous and homogenous technologies. The methodology has been applied on a panel data of Middle East banks over the time period between 1998 and 2014. The results suggest that on average small banks are more efficient and their size have less negative impact on their technical efficiency and risk management. On the other hand, large banks' risk management is found to be more flexible during financial crisis. However, banks with higher fixed assets tare associated with more costly dispose of non performing loans. This observation may provide an explanation for the rejection of positive relation between bank size and technical efficiency.