The relationship of risks and efficiency of private universal banks in the Philippines using data envelopment analysis (DEA)

• Main Authors: Ang, Karla Nicole T., Matua, Rycia C., Maslog, Daniel R.
• Format: text
• Language: English
• Published: Animo Repository 2014
• Subjects: Data envelopment analysis; Banks and banking > Philippines; Finance and Financial Management
• Online Access: https://animorepository.dlsu.edu.ph/etd_bachelors/18476
• Institution: De La Salle University

The study presents the relationship between credit, liquidity and operational risk with efficiency of banks. The three risks were measured by financial ratios namely: total debt to total asset ratio, capital to total asset ratio, and return on total assets ratio, respectively. Using data envelopment analysis (DEA), efficiency scores from zero to one resulted as a measurement of each bank on a 5-year span, from 2008-2012. The scores generated by DEA, gauging efficiency, are then used to find the correlation coefficient with risk, measured by financial ratios. The results yielded to a positive relationship for liquidity and operational risks and negative relationship for credit. Furthermore, study illustrates that there is low significance on the relationship among all the variables.