DEA efficiency of German savings banks : evidence from a goal-oriented perspective

We provide one of very few Data Envelopment Analysis efficiency studies of the German savings banks, thereby contributing evidence on the credit of their business model. This model distinguishes itself by the ultimate purposes to ensure public access to financial services and to support regional economies. To capture the respective goal set of the German savings banks, we propose a framework incorporating rationality concepts of decision making to derive appropriate performance criteria. On this basis, the 2006–2011 analysis reveals the active role of the savings banks in stabilizing the German economy during the financial crisis 2008–2009. The results also suggest that the banks are more efficient in fulfilling their public mandate than in generating profit. Furthermore, a stable scale efficiency pattern is observed, particularly showing that larger banks are experiencing notable decreasing returns to scale.