Financial restructuring, crisis, and productivity growth in bank branches: evidence from a large commercial Spanish bank

Abstract

We analyse the impact of financial restructuring and economic crises on the evolution of productivity growth within bank branches. We apply the DEA-Malmquist framework for this analysis, utilizing both production and profit approaches. The study is based on data derived from the annual balance sheets of a major Spanish commercial bank for 2011–2014, encompassing the bailout of the Spanish banking system and the second economic downturn in Spain. The key findings are as follows: Firstly, despite severe adjustments and challenging economic conditions, branch productivity exhibited growth across the entire sample period. Secondly, productivity changes were predominantly driven by technological advancements rather than efficiency improvements, underscoring the bank’s notable role in fostering innovation during this time. Thirdly, a decline in the rate of productivity growth and its components was observed, along with an increased number of branches reporting negative changes, particularly among non-super-efficient branches.