The data envelopment analysis model, evaluating the efficiency of vietnamese commercial banks

Ministry of Education and Training University of Economics HoChiMinh City NGUYEN THI HONG VINH THE DATA ENVELOPMENT ANALYSIS MODEL: EVALUATING THE EFFICIENCY OF VIETNAMESE COMMERCIAL BANKS MASTER THESIS IN ECONOMICS Supervisor: PROFESSOR DR PHAM VAN NANG HoChiMinh City – 2011 Ministry of Education and Training University of Economics HoChiMinh City NGUYEN THI HONG VINH THE DATA ENVELOPMENT ANALYSIS MODEL: EVALUATING THE EFFICIENCY OF VIETNAMESE COMMERCIAL BANKS Major: Banking and Finance Major code: 60.31.12 MASTER THESIS IN ECONOMICS Supervisor: PROFESSOR DR PHAM VAN NANG HoChiMinh City – 2011 i Acknowledgement First and foremost, I offer my sincerest gratitude to my supervisor, Professor Dr Pham Van Nang for his continuous support during my research, for his patience, motivation, enthusiasm, and immense knowledge His guidance helped me in all the time of research and writing of this thesis I could not have imagined having a better advisor and mentor for my Master study I gratefully acknowledge all the members of the proposal examination committee for their valuable comments and constructive suggestions I would like to express my sincere gratitude to all instructors and staff at Faculty of Banking and Postgraduate Faculty, University of Econimics HoChiMinh City for their support and the valuable knowledge during my study in UEH My special gratitude is extended to my English teacher, Mr Paul Scott, for his grammatical proofreading of the Thesis draft I am much indebted to Mr Scott for his precious time to read this thesis and gave his critical comments about it It is a pleasure to pay tribute also to the Dr Le Phan Thi Dieu Thao and my colleagues at the International banking faculty, University of Banking Hochiminh City for offering me opportunity to study and finish the Master course Lastly and most importantly, I wish to thank my beloved parents, and my fiancé, Ho Xuan Hien Also, I give thanks to the one above all of us, the omnipresent Father for His endless love and spiritual support during the completion of this project ii Abstract The thesis investigates the efficiency of a sample of Vietnamese commercial banks for the period of 2007-2009, by using the Data Envelopment Analysis (DEA) approach After analyzing, the research concludes that the technical efficiency of these banks was, on average, increasing from 0.683 in 2007 to 0.864 in 2009 It was also found that the average cost efficiency of the sampled banks was 53.7 percent, and the average annual growth of the Malmquist index was negative 2.6 percent over the study period; however, there is still an opportunity to improve this indicator The results presented in the thesis will be helpful to bank managers in identifying their banks‟ efficiency performance and the underlying reasons for their successes or failures It will also help banks in strategic planning, and help policy makers in their attempts to improve the overall efficiency of the banking industry and identify the need for reforms of the domestic banks KEY WORDS: Data Envelopment Analysis (DEA), efficiency, commercial banks, Vietnam iii Table of Contents Acknowledgement Abstract ii Table of Contents iii List of Tables vi List of Figures vii Abbreviations viii Chapter 1: Introduction to the study 1.1 Introduction 1.2 Research background 1.2.1 Rationale of the study 1.2.2 Overview of the Vietnamese banking system 1.3 Research objectives and questions 1.3.1 Research objectives 1.3.2 Research questions 1.4 Scope and Limitation 1.5 Research method 1.6 Implications of research 1.7 Structure of the study Chapter 2: Literature Review 11 2.1 Introduction 11 iv 2.2 Commercial banks 11 2.2.1 Definition of commercial banks 11 2.2.2 Function of commercial banks 13 2.2.3 Major factors affecting commercial banks‟ performance 14 2.3 Efficiency and factors affecting efficiency of commercial banks 16 2.3.1 Efficiency 16 2.3.2 Main factors affecting efficiency of commercial banks 17 2.4 The measurement of efficiency of Commercial banks 19 2.4.1 Efficiency analysis by the traditional method of financial indicators 19 2.4.2 Efficiency analysis by parametric frontier efficiency approach 21 2.4.3 Efficiency analysis by Non-parametric approach (DEA) 22 2.5 Literature review on measuring efficiency of banking system in Vietnam 25 2.6 Summary 26 Chapter 3: Research methodology 27 3.1 Introduction 27 3.2 Research design 27 3.3 Descriptions of Data Sample and Variables 29 3.3.1 Characteristics of Research Sample on the Vietnamese banks 29 3.3.2 Description of Variables 30 3.4 Data analysis techniques 33 3.5 Conclusion 43 Chapter 4: Empirical results of the research 44 4.1 Introduction 44 v 4.2 Descriptive Statistics 44 4.3 Analysis of Efficiency Estimates 46 4.4 Productivity Improvement with Malmquist index 53 4.5 Conclusion 56 Chapter 5: Conclusion and suggestion 57 5.1 Introduction 57 5.2 Conclusions from the research questions 57 5.2.1 Conclusions related to the first question 57 5.2.2 Conclusions related to the second question 59 5.3 Recommendations of the research study 60 5.3.1 Recommendations for Vietnamese commercial banks 60 5.3.2 Recommendations for State Banks of Vietnam 63 5.3.3 Recommendations for Government 64 5.4 Contributions of the research findings 65 5.4.1 Theoretical contribution 65 5.4.2 Methodological contribution 66 5.5 Implications of the research 66 5.6 Limitations of the research and further research 67 5.7 Conclusion 68 References ix Appedix xii vi List of Tables Table 1.1 Number of commercial banks in Vietnam, 2007-2009 Table 1.2 Some developments of Vietnamese banking system (2007-2009) Table 3.1 Sample of Vietnamese banks 29 Table 4.1: Summary of Variables on Vietnamse commercial banks, 2007 -2009 45 Table 4.2: Technical efficiency of commercial banks, 2007-2009 47 Table 4.3: Summary of Estimated Efficiency Measures, 2007-2009 49 Table 4.4: Estimated Efficiency Scores for Individual Banks, 2007 -2009 50 Table 4.5 Number of banks with DRS, IRS, and Cons, 2007-2009 53 Table 4.6: Malmquist Index summary of Annual Means 54 Table 4.7 Malmquist Index Summary of Individual Commercial Bank Means, 2007 2009 55 vii List of Figures Figure 3.1 Research process 28 Figure 3.2 Relationship between input-output factors and efficiency of commercial banks 33 Figure 3.3: Technical and Allocative Efficiencies 34 Figure 3.4: Technical and Allocative Efficiencies from an Output Orientation 35 Figure 3.5: Efficiency Measurement and Input Slacks 38 Figure 3.6: Calculation of Scale Economies in DEA 40 Figure 4.1 Trend of interest income and non-interest incomes, 2007-2009 46 Figure 5.1 The results of TE, PE, SE, AE, CE of 22 Vietnam commercial banks, 2007 2009 58 viii Abbreviations DEA Data envelopment Analysis DMU Decision Making Unit CRS Constant Returns to Scale Model VRS Variable Returns to Scale Model effch Technical efficiency change techch Technological change pech Pure technical efficiency change sech Scale efficiency change tfpch Total factor productivity change AE Allocative efficiency TE Technical efficiency CE Cost efficiency PE Pure technical efficiency SE Scale efficiency TFP Total factor productivity irs Increasing returns to scale drs Decreasing returns to scale cons Constant returns to scale EPS Earnings Per Share ROA Return On Assets ratio ROE Return On Equity ratio JOCB Joint-stock commercial banks SOCB State-owned commercial banks 67 Envelopment Analysis (DEA) with system model, we can explore and report meaningful results for bank managers This paper can help them to understand their own bank‟s efficiency compared to others, and understand the reasons for their banks‟ inefficient performances - and how to improve it The author also hope that the findings encourage the Vietnamese government to make suitable policies to improve banks‟ efficiency in the right direction, especially in the context of the world financial crisis of recent years and its effects on banking sector in Vietnam In summary, measuring banks‟ efficiency by DEA is not only a valuable tool for bank executives, but also for other finance industry executives who evaluate their performance efforts 5.6 Limitations of the research and further research The study has some limitations This paper presented an analysis on the efficiency of only 22 Vietnamese commercial banks, in the period of 2007-2009, using the Data Envelopment Analysis (DEA) approach The data was collected through Annual Reports of these banks in three major inputs (labor, capital, and deposits), and two major outputs (interest incomes and other incomes) With a bigger sample size and better range from which to choose input and output factors (compare to previous researches), the study will bring a clearer and deeper analysis on the Vietnamese banking system (in term of efficiency) with more recent information This study also estimates nonparametric Malmquist TFP indexes and its components for Vietnamese commercial banks in the sample period 2007-2009 We found that there is a decreasing trend in productivity Obviously, more detailed s tudies are needed to explain the decreasing trend; one possible factor is the rapid expansion of the industry during recent years, especially in terms of network expansion and branching Future research on cross-sectional aspects, such as comparing with foreign banks and with branches in Vietnam, or with foreign banks in other countries in the 68 Southeast Asia, or by comparing with the efficiency in other industries within the country, will still be very important and it will help to fill the gap of the research 5.7 Conclusion The study examined several efficiency measures and productivity changes in the Vietnamese commercial banks, during the period 2007–2009, using a Data Envelopment Analysis (DEA) approach Data from 22 banks was used for this purpose The analysis results indicated that the banks‟ cost efficiency average was 53.7% The sources of inefficiency of the sampled banks were found to be derived from both allocative (regulatory) and technical (managerial capacity) problems, in which the technical inefficiency score was lower than the allocative inefficiency score over the study period Significant allocative inefficiency showed that the Vietnamese commercial banks were unable to use the input mix properly The study also analyzed the changes in total factor productivity (TFP) among these sampled banks We found that the average annual growth of the Malmquist index was negative 2.5% over the study period These findings might help bank managers to understand the underlying reasons for their banks‟ efficiency performances Moreover, the research could also help policy makers to establish more comprehensive policy settings for promoting further development of the banking industry in Vietnam The results of this research contribute complementarily to the literature on banks‟ efficiency on the world The research is a reference for researchers, lecturers, and students in marketing and management, in Vietnam , and in the world of banks‟ efficiency Finally, the present study could be a reference of research methodology, not only in the banking sector in particular, but also the other social sciences ix References Arthur O‟Sullivan, Steven M Sheffrin (2007) Economics: Principles in action Upper Saddle River, New Jersey 07458: Pearson Prentice Hall, pp.15 Banker, R D., & Maindiratta, A (1988) Nonparametric Analysis of Technical and Allocative Efficiencies in Production Econometrica, p.56 Banker, R.D, A Charmens, and W W Cooper (1984), "Some Models for Estimating Technical and Scale Inefficiencies in Data Envelopment Analysis", Management Science 30, pp 1078 - 1092 Benton E.Gup, James W.Kolari,(2005), Commercial banking textbook, the Management of Risk, John Wiley and Sons, Inc Berger, A and Mester, L (1997), "Inside the black box: what explains differences in the effciencies of fnancial institutions?", Journal of Banking and Finance, 21,pp 895-947 Berger, A.N, G.A Hanweck, and D.B 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http://lknlit1.googlepages.com/2007-10-05-SBR_luu.pdf Miller, S.M., and A.G Noulas (1996), "The technical efficiency of large bank production", Journal of Banking & Finance, 20, pp 495-509 Ngo, D T (2004) Financial liberalization progress in Vietnam – Reality and Solutions Master, University of Economics and Business, Vietnam National University, Hanoi Ngo, D T (2009a) Financial liberalization in the Socialist oriented market economy in Vietnam In V D.Pham (Ed.), Socialist orientation in developing the market economy in Vietnam – Facts and solutions Hanoi: Vietnam National University Publishing House Ngo, D T (2010b) Evaluating Vietnamese Commercial Banks Using Data Envelopment Analysis Approach (Vietnamese) SSRN eLibrary Nguyen, V H (2007) Measuring Efficiency Of Vietnamese Commercial Banks: An Application Of Data Envelopment Analysis (DEA) In K M Nguyen & T L Giang (Eds.), Technical Efficiency and Productivity Growth in Vietnam (pp 11) Hanoi: Publishing House of Social Labour xi Nguyen, X Q and Bruno De Borger (2008), Bootstrapping efficiency and Malmquist productivity indices: An application to Vietnamese commercial banks, Asia-Pacific Productivity Conference 2008 Sealey, C & Lindley, J (1977), “Inputs, outputs and a theory of productio n and cost at depository financial institutions”, Journal of Finance 32, 1251-1266 Shephard, R W (1970), Theory of cost and production functions, Princeton University Press, Princeton, NJ Zikmund, W.G (1997) Business Research Methodology Fort Worth, TX: The Dryden Press xii Appedix Appedix 1: TE of the 22 Vietnamese commercial banks, CRS, 2007-2009 Bank's Name (ID) no 10 11 12 13 14 15 16 17 18 19 20 21 22 ABB ACB VBARD BIDV EIB HBB HDB MB MHB MSB OCB SEAB SGB SHB PNB STB TCB VAB VIB VCB ICB VPB Mean TE SOCBs Mean TE JBCBs MEAN TE all banks MAX MIN STDEV TE 2007 2008 2009 0.606 0.434 0.59 0.463 0.788 0.677 0.811 0.987 0.627 0.595 0.85 0.561 0.334 0.504 0.466 0.707 0.591 0.431 0.722 0.674 0.683 1.000 0.334 0.218 0.644 0.622 0.565 0.65 0.535 0.659 0.564 0.848 0.664 0.574 0.56 0.8 0.653 0.611 0.796 0.545 0.498 0.531 0.678 0.700 0.696 1.000 0.498 0.179 0.752 0.919 0.997 0.909 0.821 0.628 1 0.724 0.763 0.744 0.848 1 0.787 0.953 0.394 0.768 0.825 0.873 0.864 1.000 0.394 0.164 AVERAGE (2007-2009) 0.667 0.658 0.717 0.853 0.606 0.886 0.805 0.747 0.886 0.884 0.642 0.921 0.633 0.833 0.738 0.648 0.767 0.929 0.655 0.902 0.494 0.577 0.742 0.749 0.748 0.929 0.494 0.127 xiii Appedix 2: TE of the 22 Vietnamese commercial banks, VRS, 2007-2009 Year 2007 Year 2008 Bank ID crste vrste scale 0.606 0.752 0.806 irs 0.434 0.71 0.612 drs 0.59 0.59 drs 1 0.463 0.47 0.984 irs 1 0.788 0.788 irs 0.677 0.723 0.936 drs 0.811 0.816 0.993 irs 10 0.987 0.987 irs 11 0.627 0.738 0.85 irs 12 1 13 0.595 0.742 0.802 irs 14 0.85 0.85 irs 15 0.561 0.603 0.93 irs 16 0.334 0.51 0.654 drs 17 0.504 0.589 0.856 drs 18 1 19 0.466 0.468 0.997 irs 20 0.707 0.707 drs 21 0.591 0.934 0.633 drs 22 0.431 0.459 0.941 irs mean 0.683 0.796 0.86 std dev 0.215354 0.207508 0.142605 max 1 0.334 0.459 0.59 obs 22 22 22 Bank ID crste vrste scale 0.644 0.787 0.818 irs 0.622 0.622 drs 0.565 0.565 drs 0.65 0.65 drs 0.535 0.658 0.813 drs 0.659 0.691 0.954 irs 1 0.564 0.651 0.866 drs 0.848 0.848 drs 10 0.664 0.8 0.83 irs xiv 11 12 13 14 15 16 17 18 19 20 21 22 Year 2009 mean std dev max obs Bank ID 10 11 12 13 14 15 16 17 18 19 20 21 22 mean 0.574 0.56 0.8 0.653 0.611 0.796 0.545 0.498 0.531 0.748 0.722 0.851 0.678 0.959 1 0.809 1 0.547 0.767 0.775 0.941 0.963 0.637 0.796 0.674 0.498 0.971 0.696 0.859 0.818 0.171612 0.153238 0.155135 1 0.498 0.547 0.498 22 22 22 crste vrste scale 0.752 0.833 0.903 0.919 0.956 0.961 0.997 0.997 0.909 0.909 0.821 0.821 1 1 0.628 0.628 1 1 1 1 0.724 0.724 0.763 0.763 0.744 0.744 0.848 0.848 1 1 1 1 0.787 0.787 0.953 0.98 0.972 1 0.394 0.509 0.775 0.768 0.797 0.964 0.864 0.95 0.908 irs irs irs irs drs drs drs drs irs irs drs drs drs irs irs irs irs irs irs irs drs irs xv std dev max obs 0.158748 0.117343 0.117569 1 0.394 0.509 0.628 22 22 22 crste = technical efficiency from CRS vrste = technical efficiency from VRS scale =scale efficiency = crste/vrste Note also that all subsequence tables refer to VRS results Note: Appedix 3: MALMQUIST INDEX SUMMARY Results from DEAP Version 2.1 year = firm crs te rel to tech in yr no ************************ t-1 t vrs t+1 0.000 0.606 0.531 0.645 0.000 0.434 0.334 0.773 0.000 0.590 0.467 1.000 0.000 1.000 2.008 1.000 0.000 0.463 0.380 0.544 0.000 1.000 0.762 1.000 0.000 0.788 0.587 1.000 0.000 0.677 0.748 0.780 0.000 0.811 0.582 0.879 10 0.000 0.987 0.503 1.000 11 0.000 0.627 0.450 0.675 12 0.000 1.000 0.905 1.000 13 0.000 0.595 0.457 0.642 14 0.000 0.850 1.153 1.000 15 0.000 0.561 0.594 0.619 16 0.000 0.334 0.220 0.625 17 0.000 0.504 0.438 0.694 te xvi 18 0.000 1.000 1.931 1.000 19 0.000 0.466 0.350 0.655 20 0.000 0.707 0.660 1.000 21 0.000 0.591 0.514 0.940 22 0.000 0.431 0.394 0.500 mean year = 0.000 0.683 0.680 0.817 firm crs te rel to tech in yr no ************************ t-1 t vrs t+1 0.896 0.644 1.138 0.701 0.726 0.622 1.138 1.000 0.669 0.565 1.030 1.000 0.981 0.650 0.925 1.000 0.630 0.535 0.918 0.752 0.974 0.659 1.318 0.762 1.219 1.000 2.167 1.000 0.701 0.564 0.974 0.748 1.181 0.848 1.331 1.000 10 1.361 0.664 1.222 0.749 11 0.800 0.574 1.020 0.621 12 2.048 1.000 2.323 1.000 13 0.759 0.560 0.987 0.578 14 0.718 0.800 1.354 0.821 15 0.854 0.653 1.171 0.717 16 0.710 0.611 1.179 0.966 17 0.811 0.796 1.440 1.000 18 0.876 1.000 2.031 1.000 19 0.829 0.545 1.130 0.891 te xvii 20 0.886 1.000 0.939 1.000 21 0.724 0.498 0.894 1.000 22 0.740 0.531 0.955 0.685 mean 0.913 year = 0.696 1.254 0.863 firm crs te rel to tech in yr no ************************ t-1 t vrs t+1 0.446 0.752 0.000 0.786 0.557 0.919 0.000 0.959 0.554 0.997 0.000 1.000 0.741 0.909 0.000 1.000 0.516 0.821 0.000 0.830 0.553 1.000 0.000 1.000 0.339 0.628 0.000 1.000 1.294 1.000 0.000 1.000 0.650 1.000 0.000 1.000 10 0.923 1.000 0.000 1.000 11 0.424 0.724 0.000 1.000 12 0.407 0.763 0.000 1.000 13 0.420 0.744 0.000 1.000 14 0.610 0.848 0.000 1.000 15 0.597 1.000 0.000 1.000 16 0.513 1.000 0.000 1.000 17 0.662 1.000 0.000 1.000 18 0.495 0.787 0.000 1.000 19 0.683 0.953 0.000 0.972 te xviii 20 1.248 1.000 0.000 1.000 21 0.211 0.394 0.000 0.541 22 0.408 0.768 0.000 0.769 mean 0.602 0.864 0.000 0.948 [Note that t-1 in year and t+1 in the final year are not defined] MALMQUIST INDEX SUMMARY year = firm effch techch pech sech tfpch 1.063 1.260 1.087 0.978 1.339 1.431 1.233 1.293 1.106 1.764 0.957 1.224 1.000 0.957 1.171 0.650 0.867 1.000 0.650 0.563 1.155 1.197 1.382 0.836 1.383 0.659 1.392 0.762 0.865 0.917 1.268 1.279 1.000 1.268 1.623 0.833 1.060 0.958 0.869 0.883 1.045 1.393 1.137 0.919 1.456 10 0.673 2.004 0.749 0.899 1.349 11 0.916 1.393 0.920 0.995 1.275 12 1.000 1.505 1.000 1.000 1.505 13 0.940 1.329 0.900 1.045 1.250 14 0.941 0.813 0.821 1.146 0.765 15 1.164 1.112 1.159 1.004 1.294 16 1.832 1.328 1.545 1.186 2.434 17 1.577 1.083 1.440 1.095 1.709 18 1.000 0.673 1.000 1.000 0.673 xix 19 1.171 1.423 1.360 0.861 1.666 20 1.415 0.974 1.000 1.415 1.378 21 0.842 1.294 1.063 0.792 1.089 22 1.231 1.235 1.369 0.899 1.521 mean 1.043 1.201 1.067 0.977 1.252 year = firm effch techch pech sech tfpch 1.169 0.579 1.120 1.043 0.677 1.479 0.575 0.959 1.542 0.851 1.767 0.552 1.000 1.767 0.975 1.399 0.757 1.000 1.399 1.058 1.535 0.605 1.105 1.390 0.929 1.518 0.526 1.312 1.157 0.798 0.628 0.499 1.000 0.628 0.314 1.774 0.866 1.337 1.326 1.536 1.180 0.644 1.000 1.180 0.759 10 1.505 0.709 1.336 1.126 1.066 11 1.261 0.574 1.609 0.783 0.724 12 0.763 0.479 1.000 0.763 0.366 13 1.329 0.566 1.731 0.768 0.752 14 1.060 0.652 1.218 0.870 0.691 15 1.532 0.577 1.394 1.099 0.884 16 1.636 0.516 1.035 1.581 0.844 17 1.257 0.605 1.000 1.257 0.760 18 0.787 0.556 1.000 0.787 0.438 19 1.747 0.588 1.091 1.601 1.028 20 1.000 1.153 1.000 1.000 1.153 21 0.792 0.545 0.541 1.464 0.432 xx 22 1.446 0.543 1.122 1.289 0.786 mean 1.249 0.608 1.105 1.130 0.760 MALMQUIST INDEX SUMMARY OF ANNUAL MEANS year effch techch pech sech tfpch 1.043 1.201 1.067 0.977 1.252 1.249 0.608 1.105 1.130 0.760 mean 1.141 0.855 1.086 1.051 0.975 MALMQUIST INDEX SUMMARY OF FIRM MEANS firm effch techch pech sech tfpch 1.114 0.854 1.103 1.010 0.952 1.455 0.842 1.114 1.306 1.226 1.300 0.822 1.000 1.300 1.069 0.954 0.810 1.000 0.954 0.772 1.332 0.851 1.236 1.078 1.134 1.000 0.856 1.000 1.000 0.856 0.893 0.799 1.000 0.893 0.713 1.216 0.958 1.132 1.074 1.165 1.110 0.947 1.067 1.041 1.051 10 1.006 1.192 1.000 1.006 1.199 11 1.074 0.894 1.217 0.883 0.961 12 0.874 0.849 1.000 0.874 0.742 13 1.118 0.867 1.248 0.896 0.969 14 0.999 0.728 1.000 0.999 0.727 15 1.335 0.801 1.271 1.050 1.069 16 1.732 0.828 1.264 1.369 1.433 xxi 17 1.408 0.809 1.200 1.173 1.140 18 0.887 0.612 1.000 0.887 0.543 19 1.430 0.915 1.218 1.174 1.308 20 1.189 1.060 1.000 1.189 1.260 21 0.817 0.840 0.759 1.077 0.686 22 1.334 0.819 1.239 1.077 1.093 mean 1.141 0.855 1.086 1.051 0.975 [Note that all Malmquist index averages are geometric means] Appendix 4: Some indicators of Vietnam Banking Institutions, IMF, 2003 -2009 Unit: Billion dong: End of period 2003 2004 2005 2006 2007 2008 2009 Reserves 30,778 31,646 42,961 71,282 94,052 139,814 127,826 Demand Deposits 66,441 88,891 110,823 133,405 214,653 196,470 271,988 Time and Savings Deposits 133,617 182,408 261,269 382,396 597,162 791,066 1,004,770 General Government Deposits 23,805 32,201 33,656 36,177 47,084 64,448 63,355 Credit from Central Bank 14,491 16,679 20,943 25,436 24,571 17,560 98,822 Capital Accounts 46,986 59,411 71,920 99,827 175,697 239,779 320,162 Bonds&Money Mkt 26,265 26,530 31,048 68,378 74,421 89,464 148,271 Foreign Liabilities 10,715 18,898 23,201 32,826 55,898 87,131 123,315 Source: IMF ... has the following objectives: - To investigate to the efficiency of the Vietnamese commercial banks - To analyze the changes in the productivity and technology of the Vietnamese commercial banks. .. efficiency of commercial banks 16 2.3.1 Efficiency 16 2.3.2 Main factors affecting efficiency of commercial banks 17 2.4 The measurement of efficiency of Commercial banks ... commercial banks for the period of 2007-2009, by using the Data Envelopment Analysis (DEA) approach After analyzing, the research concludes that the technical efficiency of these banks was, on