Performance evaluation of bank branches in the atmosphere of grey uncertainty

Abstract

Purpose

As some data to evaluate the efficiency of bank branches is qualitative or uncertain, only grey numbers should be used to calculate the efficiency interval. The combination of multi-stage models and grey data can lead to a more accurate and realistic evaluation to assess the performance of bank branches. This study aims to compute the efficiency of each branch of the bank as a grey number and to group all branches into four grey efficiency areas.

Design/methodology/approach

The key performance indicators are identified based on the balanced scorecard and previous research studies. They are included in the two-stage grey data envelopment analysis (DEA) model. The model is run using the GAMS program. The grey efficiencies are calculated and bank branches have been grouped based on efficiency kernel number and efficiency greyness degree.

Findings

As policies and management approaches for branches with less uncertainty in efficiency are different from branches with more uncertainty, considering the uncertainty of efficiency values of branches may be helpful for the policy-making of managers. The grey efficiency of branches of one bank is examined in this study using the two-stage grey DEA throughout one year. The branches are grouped based on kernel and greyness value of efficiency, and the findings show that considering the uncertainty of data makes the results more consistent with the real situation.

Originality/value

The performance of bank branches is modeled as a two-stage grey DEA, in which the efficiency value of each branch is obtained as a grey number. The main originality of this paper is to group the bank branches based on two grey indexes named “kernel number” and “greyness degree” of grey efficiency value.

Citation

Karimi, T., Ahmadian, M. and Shahbazi, M. (2024), "Performance evaluation of bank branches in the atmosphere of grey uncertainty", Journal of Modelling in Management, Vol. 19 No. 6, pp. 2300-2319. https://doi.org/10.1108/JM2-09-2023-0206