A statistical approach to evaluating bank productivity

Abstract

Since 2001, when a new cycle in the process of economic transition was vigorously launched in the country, the Serbian banking sector has incurred deep changes. This issue has acutely affected the banking sector in Serbia proper, directly influencing its performance and efficiency. This paper deals with the application of a new statistical approach - the I-distance method - in measuring the financial performance of banks that do business in Serbia in order to determine their productivity level, thus stressing the performance of banks from the perspective of productivity. Additionally, this point of view is essential for projecting productivity in evaluating overall bank operation efficiency.