A classification method for banks' profitability using revised Thompson-Thrall profit ratios in DEA and cluster analysis with an application to South Asian banks Online publication date: Sun, 11-Jan-2015
by P. Sunil Dharmapala; Piyadasa Edirisuriya
International Journal of Operational Research (IJOR), Vol. 15, No. 2, 2012
Abstract: Many researchers in the past have addressed the issue of profitability of banks from different perspectives using financial ratios and decision models. Thompson et al. (1995) addressed this issue by introducing linked-cone (LC) profit ratios with assurance regions (AR) in data envelopment analysis. In this paper, we propose a method to revise LC-AR and show a contrast between Thompson-Thrall's and revised profit ratios. In an application of revised profit ratios to a set of South Asian banks, we classify them as profit-makers, loss-makers or neither. Then, analysing the banks' profitability using cluster analysis with financial ratios and revised profit ratios, we show how to strengthen the classification.
Existing subscribers:
Go to Inderscience Online Journals to access the Full Text of this article.
If you are not a subscriber and you just want to read the full contents of this article, buy online access here.Complimentary Subscribers, Editors or Members of the Editorial Board of the International Journal of Operational Research (IJOR):
Login with your Inderscience username and password:
Want to subscribe?
A subscription gives you complete access to all articles in the current issue, as well as to all articles in the previous three years (where applicable). See our Orders page to subscribe.
If you still need assistance, please email subs@inderscience.com