Portuguese banks’ performance: Comparing efficiency with their Spanish counterparts

• Autor(a) principal: Basílio, Maria S.
• Data de Publicação: 2015
• Outros Autores: Pires, Maria Clara P., Reis, José Filipe Pires
• Tipo de documento: Artigo
• Idioma: eng
• Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
• Texto Completo: https://hdl.handle.net/20.500.12207/6226
• topic: Banking; Data envelopment analysis; Efficiency; Fractional response models

Using the intermediation approach, where banks are seen as intermediaries between savers and investors, receiving deposits and providing loans, we study the efficiency of Portuguese Banks, using data from 2008 until 2013 from BankScope Database. In the first stage, data envelopment analysis is applied in order to measure efficiency. We extend this analysis to the major Spanish banks and compare the results. Given the 6-year period, the results highlight better efficiency scores for the 14 Spanish banks with an average of 0.815, comparing with the 10 Portuguese banks, which exhibit an average score of 0.783. We cover the recent financial crisis period, to ascertain if there are significant differences between the two neighbouring countries. In the second stage, we use the generalized linear models approach, applying a fractional response model, in order to explain the efficiency scores. In this stage, we use as potential explanatory variables bank specific attributes and country-specific and institutional variables. Our results indicate that the characteristics of each bank appear important to explain efficiency, particularly liquidity, and the level of financial development of a country. Additionally we investigate if there are structural differences between the two countries. The results of the Chow test indicate that we do not reject the hypothesis that the determinants of bank efficiency are the same in both countries.