Performance Assessment of Banks Using Combined Approach of Data Envelopment Analysis and Goal Programming

The banking industry is one of the most important pillars of financial markets that the effective performance of this industry has a decisive role in the growth and prosperity of the country's economy. Therefore, considering the key position and role of banks in economic growth and inflation control, it is necessary to evaluate their performance. Because in this case, efficient and inefficient banks can be identified and then the country's banking system can be improved by providing corrective solutions. Data envelopment analysis (DEA) approach is one of the most powerful and efficient approaches in the field of performance measurement that can be used to evaluate the performance of banks. It should be noted that the DEA approach based on goal programming (GP) compared to classical DEA models, has a greater discriminatory power in evaluating the performance and ranking of decision-making units (DMUs). In addition, this approach is more realistic in allocating the weights of inputs and outputs. Accordingly, in this research, the developed approach of DEA based on GP is applied in order to evaluate the performance and ranking of active banks in Tehran stock exchange. The results show the efficacy and applicability of the proposed research approach in the banking industry.