Non-performance loans, operation, and recycle efficiency analysis—Dynamic Two-stage Directional Distance Function Recycle with Assurance Regions model

Previous studies have failed to analyze a bank's operation performance and non-performing loans at the same time. Therefore, this research uses the Dynamic Two-stage directional distance function (DDF) Recycle with Assurance Regions (ARs) model to explore the efficiency of Taiwanese banks in their operation stage and recycling stage. The research results are as follows. (1) The six-year overall average efficiency is.7966. Taipei Star Bank has the best efficiency, and Fubon, Bank SinoPac, and Union Bank have the worst efficiency rankings. (2) Most banks have good efficiency in the operation stage, while efficiency in the recovery cycle stage fluctuates.