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Safe Bank

Published: 2021-05-18

Technical Efficiency of the Polish Commercial Banking Sector

Maciej Wawrzyniak Logo ORCID
Section: Problems and Opinions
https://doi.org/10.26354/bb.4.1.82.2021

Abstract

The main purpose of this article is to analyze the efficiency of the polish commercial banking sector. In order to do this, the author estimated a stochastic frontier function using the information about 24 Polish commercial banks during the period 2011-2018. For the purpose of the estimation, the author defined one product (the value of granted loans and investments in securities) and three inputs: financial (value of deposits), labour (number of employees) and fixed. The results suggest a relatively high level of technical efficiency (c.a. 85%), which increased throughout the years. The decreasing trend in return-to-scale factor (which is on average below 1) suggests that the polish commercial banking’s sector is mature. In line with the expectations, the most important input is the value of deposits (with a level of elasticity higher than 0.8). The remaining two inputs exhibit significantly lower level of elasticity (lower than 0.1). In addition, the author tested if a bank’s size or bank’s capital origin (domestic or foreign) have an influence on the efficiency. The conducted analysis led to the conclusion that there is no difference in average level of efficiency between big and small banks. On the other hand, banks with a majority of foreign capital have on average a higher level of efficiency compared to domestic banks.

JEL Codes

C23, D24, G21

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Citation rules

Wawrzyniak, M. (2021). Technical Efficiency of the Polish Commercial Banking Sector. Safe Bank, 82(1), 92–112. https://doi.org/10.26354/bb.4.1.82.2021

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Vol. 82 No. 1 (2021)
Published: 2021-11-05


ISSN: 1429-2939
eISSN: 2544-7068
Ikona DOI 10.26354

Publisher
Bankowy Fundusz Gwarancyjny

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