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Evaluating the efficiency of a bank branch

Vol. 25, Iss. 3, MARCH 2019

Received: 16 January 2019

Received in revised form: 30 January 2019

Accepted: 13 February 2019

Available online: 29 March 2019

Subject Heading: Banking

JEL Classification: G21

Pages: 533–552

https://doi.org/10.24891/fc.25.3.533

Shatalova E.P. Financial University under Government of Russian Federation, Moscow, Russian Federation
shatalova_ep@mail.ru

https://orcid.org/0000-0003-1762-0903

Shatalov A.N. Analytical Bureau of Applied Research, Moscow, Russian Federation
shatalov.66@mail.ru

https://orcid.org/0000-0001-8180-7313

Subject Adequate evaluation of a bank branch efficiency enables to make managerial decisions on the branch network transformation and maintain routine procedures for employee incentive programs. The information at the bank branch level is usually confidential and therefore, is difficult to access. There is a lack of research at this disaggregated level.
Objectives The article aims to draw up a methodology adapted for commercial banks, and to integrate it into the corporate governance processes.
Methods The study employs methods of logical analysis, structuring, and the EVA method. We used the results of works by foreign and Russian scholars on bank branch performance evaluation.
Results The article presents a review of practical methods of bank branch performance evaluation applied in the international and domestic banking business. It offers a methodology for evaluating the efficiency of a bank branch based on the economic value added method, which is adapted to the Russian banking practice.
Conclusions and Relevance It is possible to integrate the said methodology into corporate governance in banks and to apply it while taking managerial decisions.

Keywords: bank efficiency, bank branch, performance evaluation, EVA, banking

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