**6. Results**

**Table 3** shows the result of the efficient units, in percentage terms, for each year. **Table 4** shows the average efficiency levels for each year.

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**Table 4.**

*Source: self-made.*

*Average efficiency levels per year.*

*The Colombian Banking Sector: Analysis from Relative Efficiency*

**Year # Units %** 2002 6 25% 2003 9 38% 2004 9 38% 2005 8 42% 2006 9 60% 2007 10 67% 2008 11 65% 2009 10 59% 2010 11 61% 2011 11 50% 2012 14 64% 2013 14 61% 2014 15 71% 2015 13 54% 2016 15 63%

The study period begins with the lowest index, as previously stated is a period of recovery of the Colombian financial sector after its crisis; the highest index is in 2007, which coincides with the time before it started the first global financial crisis of this century; as of 2014 (with the second best average), the consequences of the

**Year Average efficiency (%)**

2002 70 2003 79 2004 78 2005 88 2006 89 2007 95 2008 87 2009 88 2010 89 2011 90 2012 92 2013 89 2014 92 2015 86 2016 86

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

global economic recession begin to be evident.

*Source: self-made.*

*Efficient units per year.*

**Table 3.**


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

#### **Table 3.**

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

**Year # of banks** 2002 24 2003 24 2004 24 2005 19 2006 15 2007 15 2008 17 2009 17 2010 18 2011 22 2012 22 2013 23 2014 21 2015 24 2016 24

**Inputs Outputs**

ables used in this investigation are shown in **Table 2**.

gathers (inputs), making loans and investments (outputs).

subsectors of the Colombian economy from 1993 to 1999.

**Table 4** shows the average efficiency levels for each year.

Noncurrent liabilities

*Number of banks that are part of the study.*

*Input and output variables.*

Equity *Source: self-made.*

*Source: self-made.*

**Table 1.**

**Table 2.**

Current assets Operating income Property, plant & equipment Net income

what is obtained from the process of transformation of them (outputs), the vari-

These same input and output variables have been used by [52] and by (Rodríguez-Lozano) [57] to study the insurance brokerage companies in the Colombian financial environment through DEA indicators, and also by [58] to determine relative efficiency in two subsectors of the Colombian economy from 1993 to 2002 and [59] to determine the measurement of relative efficiency in three

Taking into account the inputs and outputs chosen for this model and going to [56], it can be established that this model is what they call an intermediation model, which consists in measuring how the entity operates based on the monetary assets it

**Table 3** shows the result of the efficient units, in percentage terms, for each year.

**112**

**6. Results**

*Efficient units per year.*

The study period begins with the lowest index, as previously stated is a period of recovery of the Colombian financial sector after its crisis; the highest index is in 2007, which coincides with the time before it started the first global financial crisis of this century; as of 2014 (with the second best average), the consequences of the global economic recession begin to be evident.


#### **Table 4.**

*Average efficiency levels per year.*

**Figure 1** shows the behavior of the units, by efficiency range for the entire study period.

The results show that between the years 2002 and 2007, the percentage of efficient banks was in a clear rise, an increase of 42% points, despite the fact that the number of banks decreased; even 2007 was the year in which there were fewer banks for the 15 years studied. This confirms that since 2002, the sector experienced improvements. Additionally, in 2005, 79% of the banks were between 100 and 80% efficiency, ratifying the good results.

In 2007, the first financial crisis of the twenty-first century began and the impact of this crisis is evident from the results of 2008 and until 2011; there is a decrease of 17% points for efficient banks. At the same time, the efficiency range between 79.9 and 60 increased until reaching its maximum level in 2010 (33%). These results are consistent with those found by [60], in the sense that global financial crises impact the behavior of banks. As of 2011, a slow recovery process begins for the efficient, until 2014.

The Colombian economy ended 2015 with a rate slightly above 3%, despite the stagnation experienced in Latin America and the low global growth [61]; for the financial sector, the growth was 4.3% and according to [62], the balance of the banking sector was satisfactory. In terms of relative efficiency, it can be established that the share of the efficiency decreased at the same time as the holdings of the banks with low ranks increased. The efficient banking institutions had a fall of 17% points in a single year and for this same year the ranges 99.9–60% and lower to 40% increased their participation by 11 and 8% points, respectively. This means that more banks were unconcerned about managing their resources efficiently prioritizing other types of behavior as a process of deceleration of the beginning of world economy.

For the year 2016, in spite of continuing the deceleration of the economy, the Colombian banking sector reported good results, for example increased profits by 17% over the immediately previous year. In the same way, the participation of efficient banks improved to 63%, and the rest of the ranks were concentrated around a 10% share; leaving in this way very clear the difference of participation between the efficient banks and those that are not, a difference that began to take shape from the year 2006 and that from 2014 is stabilized by the grouping of the inefficient in participations below 20%.

#### **6.1 Analysis by groups**

**115**

the same until 2016.

**Figure 2.**

2 years are higher than 80%.

national or not.

although by very little.

*The Colombian Banking Sector: Analysis from Relative Efficiency*

The one that is considered the largest financial group in Colombia, Grupo Aval, is definitely the most inefficient. On the other hand, the only efficient group in all 15 years of the study is Grupo Bancolombia. Both the Grupo Bolívar (Banco Davivienda) and the Grupo Colpatria (Banco Colpatria) began the study period with relatively low rates (61 and 54% respectively) but they were improving to the point that since 2005 they are efficient and they maintained

Regarding international groups, Citibank is the one with the best results, because only in 2011, it is not efficient, but its index is 99%. The behavior of the Grupo BBVA is very similar to that of the Grupo Bolívar and Grupo Colpatria, but this group is not efficient for 2016; although it is very close, its index is 93%. The Grupo Corbanca in the 5 years of presence has rates above 80% and even in 3 years it is efficient. The Grupo GNB started in 2005 with an index of 70%, improved for the next 2 years, fell, and then became efficient, and from 2011 it repeats the cycle ending in 2016 with an indicator close to 70%. The Grupo CorpBanca Group shows better results, since in three of the 5 years of presence it is efficient, and its inefficiency is not more than 20% since the indexes of those

In **Figure 3**, the behavior of the 4 banks of the Grupo AVAL is presented; there it is evident that although the one of Banco de Bogota has indexes above 80% and is efficient in 9 of the 15 years of the study, this is not enough because the remaining three banks mark downwards since they have rates that are around 60% and in the

**Figure 4** shows the behavior of efficient banks according to whether they are

Foreign banks have a greater participation in 90% of the years; only for 2016, the participation of efficient national banks exceeds the participation of foreigners,

Now, of all the banks that are part of the study, only 24% are efficient during all the years that each of them is present in the study period: Bancolombia: 15 years, Procredit: 9 years, Finandina: 6 years, Santander de Negocios: 4 years, Bankboston: 3 years, Megabaco: 4 years, Mundo Mujer: 2 years, Multibank: 2 years, and Standard Chartered: 3 years. They are not within this group because only in 1 year they were not efficient, although this indicator is above 95%: Coomeva, WWB, Bancompartir, and Citibank.

last 3 years the Banco Popular and the Banco AV Villas have very low rates.

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

*Efficiency (%) of financial groups. Source: self-made.*

**Figure 2** shows the behavior in terms of relative efficiency of the 8 financial groups mentioned previously.

**Figure 1.** *Units by efficiency range. Source: self-made.*

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

#### **Figure 2.**

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

The results show that between the years 2002 and 2007, the percentage of efficient banks was in a clear rise, an increase of 42% points, despite the fact that the number of banks decreased; even 2007 was the year in which there were fewer banks for the 15 years studied. This confirms that since 2002, the sector experienced improvements. Additionally, in 2005, 79% of the banks were between 100 and 80%

of behavior as a process of deceleration of the beginning of world economy. For the year 2016, in spite of continuing the deceleration of the economy, the Colombian banking sector reported good results, for example increased profits by 17% over the immediately previous year. In the same way, the participation of efficient banks improved to 63%, and the rest of the ranks were concentrated around a 10% share; leaving in this way very clear the difference of participation between the efficient banks and those that are not, a difference that began to take shape from the year 2006 and that from 2014 is stabilized by the grouping of the inefficient in participations below 20%.

**Figure 2** shows the behavior in terms of relative efficiency of the 8 financial

**Figure 1** shows the behavior of the units, by efficiency range for the entire study

In 2007, the first financial crisis of the twenty-first century began and the impact of this crisis is evident from the results of 2008 and until 2011; there is a decrease of 17% points for efficient banks. At the same time, the efficiency range between 79.9 and 60 increased until reaching its maximum level in 2010 (33%). These results are consistent with those found by [60], in the sense that global financial crises impact the behavior of banks. As of 2011, a slow recovery process begins for the efficient, until 2014. The Colombian economy ended 2015 with a rate slightly above 3%, despite the stagnation experienced in Latin America and the low global growth [61]; for the financial sector, the growth was 4.3% and according to [62], the balance of the banking sector was satisfactory. In terms of relative efficiency, it can be established that the share of the efficiency decreased at the same time as the holdings of the banks with low ranks increased. The efficient banking institutions had a fall of 17% points in a single year and for this same year the ranges 99.9–60% and lower to 40% increased their participation by 11 and 8% points, respectively. This means that more banks were unconcerned about managing their resources efficiently prioritizing other types

**114**

**Figure 1.**

period.

efficiency, ratifying the good results.

**6.1 Analysis by groups**

groups mentioned previously.

*Units by efficiency range. Source: self-made.*

*Efficiency (%) of financial groups. Source: self-made.*

The one that is considered the largest financial group in Colombia, Grupo Aval, is definitely the most inefficient. On the other hand, the only efficient group in all 15 years of the study is Grupo Bancolombia. Both the Grupo Bolívar (Banco Davivienda) and the Grupo Colpatria (Banco Colpatria) began the study period with relatively low rates (61 and 54% respectively) but they were improving to the point that since 2005 they are efficient and they maintained the same until 2016.

Regarding international groups, Citibank is the one with the best results, because only in 2011, it is not efficient, but its index is 99%. The behavior of the Grupo BBVA is very similar to that of the Grupo Bolívar and Grupo Colpatria, but this group is not efficient for 2016; although it is very close, its index is 93%. The Grupo Corbanca in the 5 years of presence has rates above 80% and even in 3 years it is efficient. The Grupo GNB started in 2005 with an index of 70%, improved for the next 2 years, fell, and then became efficient, and from 2011 it repeats the cycle ending in 2016 with an indicator close to 70%. The Grupo CorpBanca Group shows better results, since in three of the 5 years of presence it is efficient, and its inefficiency is not more than 20% since the indexes of those 2 years are higher than 80%.

In **Figure 3**, the behavior of the 4 banks of the Grupo AVAL is presented; there it is evident that although the one of Banco de Bogota has indexes above 80% and is efficient in 9 of the 15 years of the study, this is not enough because the remaining three banks mark downwards since they have rates that are around 60% and in the last 3 years the Banco Popular and the Banco AV Villas have very low rates.

**Figure 4** shows the behavior of efficient banks according to whether they are national or not.

Foreign banks have a greater participation in 90% of the years; only for 2016, the participation of efficient national banks exceeds the participation of foreigners, although by very little.

Now, of all the banks that are part of the study, only 24% are efficient during all the years that each of them is present in the study period: Bancolombia: 15 years, Procredit: 9 years, Finandina: 6 years, Santander de Negocios: 4 years, Bankboston: 3 years, Megabaco: 4 years, Mundo Mujer: 2 years, Multibank: 2 years, and Standard Chartered: 3 years. They are not within this group because only in 1 year they were not efficient, although this indicator is above 95%: Coomeva, WWB, Bancompartir, and Citibank.

**Figure 3.** *Efficiency (%) of banks of the grupo aval. Source: self-made.*

**Figure 4.**

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