Broad category

Traditional efficiency correlates

Proposed correlates for Barnett’s model

Economic Environment

GDP

GDP

Size and scope of bank

1) Total assets

2) HHI based on TA

Total deposits

Risk management

Standard Deviation of ROA, ROE

Standard deviation of Net income/inputs to production

Cost management

Interest expenses, Non-interest expenses.

TC/deposits

Structure of funding

1) Interbank dep/TA, customer dep/TA, securitized liab/TA, branches per million of TA

Deposits/labor, Deposits/excess reserve,

Deposits/material

Quality of staff

Expense per employee

Same

Quality of facilities

Expense per branch

Same

Investment in technology

ATM’s, online banking, new products

ATM and Telecommunication expenditure