Branches’ technical efficiency of an Islamic Bank in Riyadh

Abstract EN

This papei utilises the non-parametric frontier approach Data Envelopment Analysis Approach (DEA), to analyse the technical efficiency of an Islamic bank in Riyadh by using total expenses and number of employees in each branch as an input, and total revenue and daily average work as output.

The study evaluates 67 branches of the bank thats located in Riyadh.

More than 50% of the branches, less than 80% efficient, which imply the possibility of cost reduction.

Fifty Six branch out of 67 less than 100%.

If the 56 less efficient branches increased their productivity to the level achieve by the 11 best-practice branches, the total savings the bank can achieved in the expenses is about SR50 million per year, and labor can be reduced by about 116 employees.