The aim of this paper is to assess the relative efficiency of commercial banks in one developing country, i.e. the Republic of North Macedonia by using the data envelopment analysis (DEA) technique-window analysis. The selection of inputs and outputs plays a key role when applying DEA for assessing the efficiency of decision-making units (DMUs). In the conducted research two inputs and two outputs have been selected. The sample consists of 14 commercial banks and the period that is being observed is an eleven year span from 2007 to 2017. According to the average efficiency score for the whole observed period, the most efficient bank belongs to the group of large banks, which simultaneously shows the highest efficiency. The banking sector in the Republic of North Macedonia, as a whole, showed the highest efficiency in 2007, and the lowest efficiency in 2011.

The aim of this paper is to assess the relative efficiency of the branches of Komercijalna Banka AD Skopje during a three-year period (from 2009 to 2011). The research sample consists of eight branches performing the same financial activities during the reporting period. The mathematical technique DEA window analysis was used in the first phase in order to allow monitoring of the trend of the relative efficiency of each branch under consideration. From the bank management point of view, unexpected results were obtained in this phase; to validate the results the AHP-DEA validation model was proposed and used in the second phase. The management verified the obtained results claiming they were especially valuable in the process of making justifiable decisions for the further successful performance of the bank.

The aim of this paper is to evaluate the relative efficiency of commercial banks in three developing countries in Europe (North Macedonia, Serbia, and Croatia) in the period from 2015 to 2019, and to provide targets for improvement for the inefficient banks by using DEA. The variables are selected under the income-based approach. Based on the output-oriented BCC model, unusual results are obtained for a few commercial banks in each country, that is, they are BCC relative efficient, which is contrary to the real situation. In order to identify outliers that can affect the efficiency results, a super-efficiency procedure is applied so that banks with a super-efficiency score higher than 1.2 (outliers) or for which a feasible solution was not found are considered in detail and removed, and then the output-oriented BCC model is rerun. Based on the obtained results, the Macedonian commercial banking system shows the highest efficiency (91.1%), followed by the Croatian (90.9%) and the Serbian (81.9%) banking system. The estimated targets for improvement of the inefficient commercial banks could help their top bank management in better resource allocation and making fact-based and faster decisions by which they can improve the operation of the banks they lead and contribute to the stability of the financial system.

The subject of this paper is to measure the efficiency of the Macedonian banking sector by applying two approaches: firstly, comparative analysis on the efficiency indicators of the banking sector in the Republic of Macedonia and the countries of Central and Southeastern Europe (CSEE) and secondly, Data Envelopment Analysis (DEA). The aim is to provide directions and guidelines for further strengthening of the Macedonian banking sector. According to the comparative analysis of the efficiency indicators (net interest margin and operating costs) of the Macedonian banking sector and the countries of CSEE, the countries whose banking sector shows lower operating costs are characterized with a higher level of financial deepening and greater degree of financial intermediation. The high interest margins direct towards unsuitable allocation of financial resources and insufficient competitiveness in the domestic banking sector. When applying the DEA approach, it can be stated that the group of large banks marks the highest efficiency within the Macedonian banking sector. The high concentration degree of banking activities within the group of large banks with a leading role in determining the interest rates, results in a rigid interest policy of the banks. In the direction of strengthening the efficiency of the Macedonian banking sector as a whole, the obtained results show that it is necessary for the banks to be further consolidated so as to utilize the advantages of the economies of scale, increase competitiveness, offer a diversified structure of products, invest in new contemporary software solutions that will 318 E.Naumovska, V.Cvetkoska / Efficiency of the Macedonian Banking Sector allow reinforcement of their employees' productivity and long-term reduction of the operating costs, as well.

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