Evaluating profitability and efficiency of bank performance: The case of Kazakhstan Banks

ABSTRACT: Using data from 2005 to 2010, this thesis investigated the overall bank performance of Kazakhstan banks. The performance of the sector has been determined by product of efficiency and profitability. The preferred methodology for efficiency measurement has been Data Envelopment Analysis (DEA). DEA is a special linear programming model for determining the comparative efficiency of Decision-Making Units. The profitability has been evaluated by exploring Return of Assets (ROA) and Return on Equity (ROE). Findings indicate that Kazakhstan banking sector is financially strong, which can persist during the Global Financial Crisis (GFC). In addition, a comparison has been made among the results of efficiency and profitability. The analysis has shown that there is no clear correlation between efficiency and profitability for Kazakhstan Banks. Keywords: Data Envelopment Analysis, Profitability, Efficiency, Bank Performance. …………………………………………………………………………………………………………………………