Performance Evaluation of the Taiwanese Banking Industry before and after the COVID-19 Pandemic
Abstract
:1. Introduction
2. Literature Review
2.1. Application of Quantitative Analysis Tools on Bank Performance
2.2. DEA Application on Bank Performance
3. Methodology
3.1. SBM Model
3.2. SBM-Max Model
3.3. Numerical Analysis Example
4. Empirical Case Analysis
4.1. Case Background
4.2. Bank Performance
4.3. Analysis of the Input–Output Gap of Inefficient Banks
5. Conclusions
Author Contributions
Funding
Data Availability Statement
Conflicts of Interest
Appendix A
Variable | Definition |
---|---|
Operating expenses | An expenditure that a business incurs as a result of performing its normal business operations. |
Employment expenses | All costs, expenses, debts, liabilities, and obligations related to or incurred in respect of employment including salaries, fees, wages, incentive pay, gratuities, bonuses, vacation pay, holiday pay, other paid leave, overtime, standby pay, sick pay, workers’ compensation legislation contributions, or costs. |
Lending | The activity of lending money to people and organizations that they pay back with interest. |
Interest expenses | Interest payable on any borrowings—bonds, loans, convertible debt, or lines of credit. |
Net interest income | The difference between the revenue generated from interest-bearing assets and the expenses associated with paying on its interest-bearing liabilities. |
Handling fees | What a customer is charged in order to cover expenses not related to the product or shipping. |
After-tax surplus | The profit or earnings after all expenses have been deducted from revenue. |
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DMU | x1 | x2 | y | Efficiency Score | ||
---|---|---|---|---|---|---|
BCC | SBM | SBM-Max | ||||
A | 2 | 7 | 1 | 1 | 1 | 1 |
B | 4.5 | 2 | 1 | 1 | 1 | 1 |
C | 2.5 | 5 | 1 | 1 | 1 | 1 |
D | 6 | 5 | 1 | 0.556 | 0.550 | 0.708 |
E | 3 | 3 | 1 | 1 | 1 | 1 |
Year | Statistics | Operating Expenses | Employment Expenses | Lending | Interest Expenses | Net Interest Income | Handling Fees | After-Tax Surplus |
---|---|---|---|---|---|---|---|---|
2018 | Average | 14,653 | 8254 | 1,032,203 | 13,224 | 18,147 | 6417 | 29,009 |
Minimum value | 1277 | 373 | 16,139 | 2037 | 1 | 91 | 3333 | |
Maximum value | 30,118 | 15,377 | 2,592,200 | 38,259 | 34,776 | 16,527 | 58,486 | |
Standard deviation | 7866 | 4513 | 761,217 | 9365 | 10,145 | 4825 | 15,691 | |
Kurtosis | −0.569 | −1.051 | −0.688 | 1.403 | −0.801 | 0.409 | −0.808 | |
Skewness | 0.134 | −0.061 | 0.347 | 1.018 | −0.200 | 1.039 | 0.062 | |
2019 | Average | 15,381 | 8594 | 1,082,031 | 14,712 | 18,135 | 6708 | 30,336 |
Minimum value | 1285 | 424 | 3206 | 2560 | 1 | 291 | 1882 | |
Maximum value | 31,940 | 15,855 | 2,676,141 | 39,355 | 34,900 | 18,725 | 60,114 | |
Standard deviation | 8645 | 5126 | 771,205 | 9944 | 10,430 | 5480 | 16,903 | |
Kurtosis | −0.580 | −1.220 | −0.597 | 0.414 | −0.857 | 0.303 | −0.870 | |
Skewness | 0.273 | −0.174 | 0.387 | 0.752 | −0.136 | 1.046 | 0.015 | |
2020 | Average | 15,474 | 8696 | 1,162,400 | 9706 | 17,255 | 6566 | 28,791 |
Minimum value | 1172 | 387 | 12,453 | 795 | 628 | 168 | 2868 | |
Maximum value | 32,494 | 15,795 | 2,869,204 | 26,565 | 33,740 | 19,831 | 58,669 | |
Standard deviation | 8838 | 5838 | 821,171 | 6844 | 10,330 | 5396 | 16,515 | |
Kurtosis | −0.528 | 0.050 | −0.625 | 0.500 | −1.101 | 1.005 | −0.781 | |
Skewness | 0.321 | 0.370 | 0.333 | 0.705 | −0.035 | 1.280 | 0.299 | |
2021 | Average | 15,597 | 9134 | 1,144,183 | 5824 | 18,011 | 6849 | 29,466 |
Minimum value | 1249 | 379 | 22,443 | 279 | 885 | 192 | 2876 | |
Maximum value | 31,926 | 16,718 | 2,455,870 | 13,001 | 35,731 | 21,324 | 61,210 | |
Standard deviation | 8967 | 5428 | 864,482 | 4865 | 11,461 | 5763 | 17,256 | |
Kurtosis | −0.647 | −1.108 | −0.848 | 0.734 | −1.301 | 1.127 | −0.832 | |
Skewness | 0.237 | −0.189 | 0.236 | 0.816 | −0.034 | 1.245 | 0.261 |
Banking System | DMUs | 2018 Efficiency (Rank) | 2019 Efficiency (Rank) | 2020 Efficiency (Rank) | 2021 Efficiency (Rank) |
---|---|---|---|---|---|
State-owned banks | Bank of Taiwan | 0.986 (13) | 0.789 (18) | 0.850 (18) | 0.780 (18) |
Land Bank of Taiwan | 1 (1) | 1 (1) | 1 (1) | 1 (1) | |
Changhua Commercial Bank | 0.983 (14) | 0.928 (15) | 0.946 (16) | 0.950 (15) | |
Taiwan Cooperative Bank | 1 (1) | 1 (1) | 1 (1) | 1 (1) | |
First Commercial Bank | 1 (1) | 1 (1) | 0.965 (12) | 1 (1) | |
Taiwan Business Bank | 0.962 (16) | 0.945 (14) | 0.949 (15) | 0.965 (14) | |
Overall average | 0.989 | 0.944 | 0.952 | 0.949 | |
Private banks | Cathay United Bank | 1 (1) | 1 (1) | 1 (1) | 1 (1) |
Shin Kong Commercial Bank | 1 (1) | 1 (1) | 1 (1) | 1 (1) | |
E.Sun Commercial Bank | 1 (1) | 1 (1) | 1 (1) | 1 (1) | |
Union Bank of Taiwan | 0.977 (14) | 0.996 (12) | 0.960 (13) | 0.973 (13) | |
Taishin International Bank | 0.863 (18) | 0.879 (16) | 0.915 (17) | 0.931 (17) | |
Yuanta Commercial Bank | 0.961 (17) | 0.991 (13) | 0.951 (14) | 0.938 (16) | |
Overall average | 0.967 | 0.978 | 0.971 | 0.974 | |
Foreign banks | Standard Chartered Bank | 1 (1) | 0.805 (17) | 1 (1) | 1 (1) |
Citibank | 1 (1) | 1 (1) | 1 (1) | 1 (1) | |
MUFG Bank | 1 (1) | 1 (1) | 1 (1) | 1 (1) | |
The Shanghai Commercial and Savings Bank | 1 (1) | 1 (1) | 1 (1) | 1 (1) | |
Fubon Bank | 1 (1) | 1 (1) | 1 (1) | 1 (1) | |
UBS | 1 (1) | 1 (1) | 1 (1) | 1 (1) | |
Overall average | 1 | 0.968 | 1 | 1 |
Banking System | Bank | 2018 | 2019 | 2020 | 2021 |
---|---|---|---|---|---|
State-owned banks | Bank of Taiwan | ||||
Land Bank of Taiwan | ☺ | ☺ | ☺ | ||
Changhua Commercial Bank | |||||
Taiwan Cooperative Bank | ☺ | ☺ | ☺ | ☺ | |
First Commercial Bank | ☺ | ☺ | ☺ | ||
Taiwan Business Bank | |||||
Private banks | Cathay United Bank | ☺ | ☺ | ☺ | |
Shin Kong Commercial Bank | ☺ | ||||
E.Sun Commercial Bank | ☺ | ☺ | ☺ | ||
Union Bank of Taiwan | |||||
Taishin International Bank | |||||
Yuanta Commercial Bank | |||||
Foreign banks | Standard Chartered Bank | ☺ | ☺ | ||
Citibank | ☺ | ☺ | ☺ | ☺ | |
MUFG Bank | ☺ | ☺ | ☺ | ☺ | |
The Shanghai Commercial and Savings Bank | ☺ | ☺ | ☺ | ||
Fubon Bank | ☺ | ☺ | ☺ | ||
UBS | ☺ | ☺ | ☺ |
Year-Input Variable | State-Owned Banks | Private Banks | Foreign Banks |
---|---|---|---|
2018—Operating expenses | 0% | 27.38% | 0% |
2019—Operating expenses | 4.88% | 32.06% | 29.47% |
2020—Operating expenses | 1.69% | 35.00% | 0% |
2021—Operating expenses | 2.96% | 39.53% | 0% |
Overall average | 2.38% | 33.49% | 7% |
2018—Employment expenses | 55.14% | 29.97% | 0% |
2019—Employment expenses | 20.46% | 36.91% | 44.48% |
2020—Employment expenses | 21.12% | 21.87% | 0% |
2021—Employment expenses | 12.12% | 36.29% | 0% |
Overall average | 27.21% | 31.26% | 11% |
2018—Lending | 40.67% | 42.63% | 0% |
2019—Lending | 43.57% | 31.03% | 0% |
2020—Lending | 41.49% | 37.70% | 0% |
2021—Lending | 43.98% | 17.46% | 0% |
Overall average | 42.43% | 32.20% | 0% |
2018—Interest expenses | 4.19% | 0.02% | 0% |
2019—Interest expenses | 31.09% | 0% | 0% |
2020—Interest expenses | 35.70% | 5.43% | 0% |
2021—Interest expenses | 40.95% | 6.72% | 0% |
Overall average | 27.98% | 3.04% | 0% |
Year-Input Variable | State-Owned Banks | Private Banks | Foreign Banks |
---|---|---|---|
2018—Operating expenses | 0% | 27.38% | 0% |
2019—Operating expenses | 4.88% | 32.06% | 29.47% |
2020—Operating expenses | 1.69% | 35.00% | 0% |
2021—Operating expenses | 2.96% | 39.53% | 0% |
Overall average | 2.38% | 33.49% | 7% |
2018—Employment expenses | 55.14% | 29.97% | 0% |
2019—Employment expenses | 20.46% | 36.91% | 44.48% |
2020—Employment expenses | 21.12% | 21.87% | 0% |
2021—Employment expenses | 12.12% | 36.29% | 0% |
Overall average | 27.21% | 31.26% | 11% |
2018—Lending | 40.67% | 42.63% | 0% |
2019—Lending | 43.57% | 31.03% | 0% |
2020—Lending | 41.49% | 37.70% | 0% |
2021—Lending | 43.98% | 17.46% | 0% |
Overall average | 42.43% | 32.20% | 0% |
2018-Interest expenses | 4.19% | 0.02% | 0% |
2019-Interest expenses | 31.09% | 0% | 0% |
2020—Interest expenses | 35.70% | 5.43% | 0% |
2021—Interest expenses | 40.95% | 6.72% | 0% |
Overall average | 27.98% | 3.04% | 0% |
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Lee, C.-F.; Yang, F.-C. Performance Evaluation of the Taiwanese Banking Industry before and after the COVID-19 Pandemic. Mathematics 2024, 12, 2817. https://doi.org/10.3390/math12182817
Lee C-F, Yang F-C. Performance Evaluation of the Taiwanese Banking Industry before and after the COVID-19 Pandemic. Mathematics. 2024; 12(18):2817. https://doi.org/10.3390/math12182817
Chicago/Turabian StyleLee, Chuan-Feng, and Fu-Chiang Yang. 2024. "Performance Evaluation of the Taiwanese Banking Industry before and after the COVID-19 Pandemic" Mathematics 12, no. 18: 2817. https://doi.org/10.3390/math12182817