Ranking Iranian Commercial Banks

In this paper we intend to rank 5 Iranian commercial banks: Bank Melli Iran, Bank Saderat, Bank Mellat, Bank Sepah and Bank Tejarat, which have 12075 branches across the country with 185 supervisory offices. The number of the supervisory offices among these banks varies from 33 to 42. The Monetary Authorities have shown interests in ranking the banks as well as determining their efficiencies. There are international institutions such as the Bankers, which deal with ranking banks in different countries. We have tried to measure the operational efficiencies of the mentioned five Iranian banks. First we provide a brief history of these banks. Then, three major methods of ranking, i.e., principal components, numerical taxonomy and a combination of these two methods are discussed. On the basis of these analyses, we define 24 different indices for ranking each of these five banks. Input and output variables are then defined using Data Envelop Analysis (D.E.A), for estimation of bank efficiencies. Finally with the use of the statistical inference it is shown that three out of these five banks are equally efficient with no major differences.