**7. Conclusions**

The financial sector is important in any economy, since it is the one that brings together those agents that have monetary resources to spare with the agents that need those resources. In Colombia, this sector is one of those that have marked the growth of the economy for several years; even more, at a time of global economic slowdown, it is the one that has definitely had very good profits. An example of this is the year 2016 in which despite the global recession this sector obtained an increase of 24.8% in its profits.

The Colombian banking sector emerges from the crises of the twentieth century, preparing itself to tackle the twenty-first century, through an organization that prioritizes the formation of financial groups of both national and foreign origin; this means that purchases and mergers have been the order of the day. In the last 15 years, the period of time of this investigation, there has been a great movement regarding the number of banks in the sector in each year. Although this period began with 24 banks in 2002, discounting the banks owned by the government and closing 2016 with this same number of banks do not mean that there was no movement in the intervening years.

**117**

*The Colombian Banking Sector: Analysis from Relative Efficiency*

The Santander Colombia, Scotiabank, HSBC Colombia, Helm, Union Colombiano, Tequendama, Bansuperior, Megabanco, Granahorrar, Colmena, and Conavi banks disappeared from the sector, either because they were purchased or because they merged. The Standard Chartered bank closed voluntarily and the bank Bankboston also settled voluntarily. The following banks entered: Corpbanca, Procredit Colombia, Bancamia, WWB, Coomeva, Finandina, Falabella, Pichincha Coopcentral, Santander de Negocios, Mundo Mujer, Multibank, and Bancompartir. To study this sector, the DEA methodology is perfectly adjusted since it is not necessary to predetermine the production function and a set of multiple entries and multiple outputs can be worked out to obtain a single indicator per bank and per

Within this investigation, it has been possible to establish that of the 13 bank s that entered the sector during the study period, and that were previously mentioned, 62% have obtained such good results that at least 90% of the years of existence have been efficient and when they are not, the indicator is above 90%. Overall, it can be determined that the average relative efficiency over the last 15 years of the Colombian banking sector is 86%, despite having raffled the first global financial crisis of this century and living a severe economic recession worldwide. The highest percentage of efficient banks is in 2014 (71%), for 2016 37% of

It was also established that one does not need to be the most important bank, nor the largest one in terms of assets, nor have they obtained the most voluminous profits, nor belong to the most powerful financial group, and nor have years of evolution, to be efficient. Additionally, not being a bank that is part of a very important financial group, it is efficient. Otherwise, so be a robust financial group, this does

The results also show that there is a large gap between the percentage of efficient and inefficient banks. This gap began in 2006 with 47% points of difference, which increases for 2008 and ends in the last year of the study with more than 50% points. On the other hand, the foreign banks have been more representative in the total of efficiency than the national banks; this situation only has a very slight change for

This research was carried out using public information to which there is free access, but it is evident that for a better approximation to the measurement of relative efficiency it would be very good to have access to information that in Colombia is considered as private. In other words, the directors of the different banks agree to

On the other hand, bank managers should take advantage of the conclusions reached to improve their performance, and if that were the case, the performance of

provide the information required to improve this study.

*DOI: http://dx.doi.org/10.5772/intechopen.84585*

period studied.

banks are inefficient.

the year 2016.

the whole group.

**8. Recommendations**

not mean that as a group, be efficient.

### *The Colombian Banking Sector: Analysis from Relative Efficiency DOI: http://dx.doi.org/10.5772/intechopen.84585*

*Accounting and Finance - New Perspectives on Banking, Financial Statements and Reporting*

The financial sector is important in any economy, since it is the one that brings together those agents that have monetary resources to spare with the agents that need those resources. In Colombia, this sector is one of those that have marked the growth of the economy for several years; even more, at a time of global economic slowdown, it is the one that has definitely had very good profits. An example of this is the year 2016 in which despite the global recession this sector obtained an

The Colombian banking sector emerges from the crises of the twentieth century,

preparing itself to tackle the twenty-first century, through an organization that prioritizes the formation of financial groups of both national and foreign origin; this means that purchases and mergers have been the order of the day. In the last 15 years, the period of time of this investigation, there has been a great movement regarding the number of banks in the sector in each year. Although this period began with 24 banks in 2002, discounting the banks owned by the government and closing 2016 with this same number of banks do not mean that there was no move-

**116**

**Figure 4.**

**Figure 3.**

**7. Conclusions**

*Behavior of efficient banks. Source: self-made.*

*Efficiency (%) of banks of the grupo aval. Source: self-made.*

increase of 24.8% in its profits.

ment in the intervening years.

The Santander Colombia, Scotiabank, HSBC Colombia, Helm, Union Colombiano, Tequendama, Bansuperior, Megabanco, Granahorrar, Colmena, and Conavi banks disappeared from the sector, either because they were purchased or because they merged. The Standard Chartered bank closed voluntarily and the bank Bankboston also settled voluntarily. The following banks entered: Corpbanca, Procredit Colombia, Bancamia, WWB, Coomeva, Finandina, Falabella, Pichincha Coopcentral, Santander de Negocios, Mundo Mujer, Multibank, and Bancompartir.

To study this sector, the DEA methodology is perfectly adjusted since it is not necessary to predetermine the production function and a set of multiple entries and multiple outputs can be worked out to obtain a single indicator per bank and per period studied.

Within this investigation, it has been possible to establish that of the 13 bank s that entered the sector during the study period, and that were previously mentioned, 62% have obtained such good results that at least 90% of the years of existence have been efficient and when they are not, the indicator is above 90%.

Overall, it can be determined that the average relative efficiency over the last 15 years of the Colombian banking sector is 86%, despite having raffled the first global financial crisis of this century and living a severe economic recession worldwide.

The highest percentage of efficient banks is in 2014 (71%), for 2016 37% of banks are inefficient.

It was also established that one does not need to be the most important bank, nor the largest one in terms of assets, nor have they obtained the most voluminous profits, nor belong to the most powerful financial group, and nor have years of evolution, to be efficient. Additionally, not being a bank that is part of a very important financial group, it is efficient. Otherwise, so be a robust financial group, this does not mean that as a group, be efficient.

The results also show that there is a large gap between the percentage of efficient and inefficient banks. This gap began in 2006 with 47% points of difference, which increases for 2008 and ends in the last year of the study with more than 50% points.

On the other hand, the foreign banks have been more representative in the total of efficiency than the national banks; this situation only has a very slight change for the year 2016.
