Technical Efficiency and Super-efficiency of the Banking Sector in Slovakia

In this paper, the technical efficiency and the super-efficiency of a representative sample of the commercial banking institutions in Slovakia is analysed with the aid of well-known radial and non-radial DEA models: (i) the BCC model of Banker, Charnes and Cooper; (ii) the SBM model of Tone; and (iii) the super-efficiency SBM model of Tone. This paper differs from the so far published literature, as it extends the application of the BCC and the SBM model by the super-efficiency SBM model which is able also to rank efficient units. Two implications of gained results for managerial and regulatory purposes are then drawn. First, the management of the banking institutions with the poorest performances should change their managerial procedures and adopt enhanced-incentive policy. Second, the regulatory body should foresee an effort of the banking institutions licenced by the local central bank to become the branch office of the foreign bank.