Evaluation of Latvian Commercial Banks Performance

The aim of this article is to assess performance efficiency of the Latvian commercial banks in the period from 2006 till 2012. In order to achieve research results, the authors initially conducted content analysis of the scientific literature on the most frequently used methods of bank performance efficiency assessment. Having performed content analysis, it has been concluded that in the scientific literature bank performance is estimated using parametric and non-parametric methods. One of the most popular methods is Data Envelopment Analysis (DEA). Therefore, the authors analyzed the performance efficiency of the Latvian commercial banks on the basis of the data from Bankscope data base, primarily having determined bank financial indicators that are most frequently analyzed using DEA. Assessing performance efficiency of the Latvian commercial banks, the authors have come to the conclusion that frequently large banks are comparatively a lot more efficient than small banks. One of the main reasons might be the fact that large banks have lower administrative expenses, and that gives them the opportunity to increase performance efficiency and competitiveness in comparison with small banks. The data obtained demonstrate that small banks need to look for new solutions to improve their performance efficiency