Scientific Collection «InterConf», (39): with the Proceedings of the 8th International Scientific and Practical Conference «Science and Practice: Implementation to Modern Society» (December 26-28, 2020) at Manchester, Great Britain

Determination of İnputs, Outputs and Decision-Making Units 
According to the DEA, inputs and outputs should be defined to measure the 
efficiency. In addition to this, for the banking sector defining inputs and outputs is not 
easy. For this process, first we researched similar studies in the literature and decided 

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SCIENTIFIC COLLECTION «INTERCONF» | № 3(39)
410 
to use 3 inputs and 2 outputs in this study.
 
Fig. Azerbaijani Banks in 2020 
 
These inputs are Total Assets, Total Equity and Interest Expenses. The Outputs are 
Interest Income and Net Profit. In our analysis, we used the data of the 5 largest banks in 
Azerbaijan by assets for the 2019 and 3
rd
half of 2020. The data of the five banks we will 
use in the analysis have been made public in their annual and quarterly reports. 
 
Fig. Azerbaijani Banks in 2019 
Total Assets
Total equity
İnterest
expense
İnterest
income
Net profit
İnternational Bank of Azerbaijan
8 187 558 240
1 324 542 560
75 367 900
301 716 050
226 348 150
Pasha Bank
4 868 963 000
516 408 000
32 175 000
158 353 000
60 532 000
Kapital Bank
5 040 567 000
582 203 000
36 935 000
326 103 000
289 168 000
Xalq Bank
2 295 220 000
437 650 000
14 761 730
78 970 180
25 935 330
Bank Republic
1 070 039 630
82 376 498
20 255 166
55 647 485
35 392 319
-
1 000 000 000
2 000 000 000
3 000 000 000
4 000 000 000
5 000 000 000
6 000 000 000
7 000 000 000
8 000 000 000
9 000 000 000
Azerbaijani Banks 2020
İnternational Bank of Azerbaijan
Pasha Bank
Kapital Bank
Xalq Bank
Bank Republic
Total Assets
Total Equity
İnterest
Expense
İnterest
İncome
Net Profits
İnternational Bank of Azerbaijan 9 341 745 000
1 683 728 000
135 888 000
474 408 000
215 708 000
Pasha Bank
5 440 439 000
560 056 000
57 658 000
257 103 000
77 097 000
Kapital Bank
4 143 322 000
425 054 000
63 365 000
400 957 000
134 708 000
Bank Republic
1 336 124 000
72 197 000
28 035 000
72 346 000
22 539 000
Xalq Bank
2 430 478 669
396 176 335
19 626 342
110 720 135
29 310 217
-
1 000 000 000
2 000 000 000
3 000 000 000
4 000 000 000
5 000 000 000
6 000 000 000
7 000 000 000
8 000 000 000
9 000 000 000
10 000 000 000
Azerbaijani Banks 2019
İnternational Bank of Azerbaijan
Pasha Bank
Kapital Bank
Bank Republic
Xalq Bank

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 SCIENCE AND PRACTICE: IMPLEMENTATION TO MODERN SOCIETY
411 
Result of Analysis 
We can observe that, the efficiency rates of all the banks have dropped in 2020 
compared to 2019 except Kapital Bank and Bank Republic, which maintained the 
highest possible rate in both years. Xalq Bank came third in the ranking, both in 2019 
and 2020 although it suffered the largest loss in efficiency, from 0.89 to 0.61.
Fig. Result of analysis 
International bank of Azerbaijan, which possessed the largest number of total 
assets in both years of observation, and Pasha Bank came after Xalq Bank in 2019 and 
2020, respectively. On the other hand, efficient banks are found to have a constant 
return to scale, while other banks are found to be increasing return to scale except 
International Bank of Azerbaijan in both years. From this result, it is clear to us that 
when banks have a constant return to scale, those with inputs increase by 1 unit, those 
with outputs increase by 1 unit, and increasing return to scale means that those with 
outputs increase by more than 1.