In the last decade, banks have been exposed to increasingly tough competition. This is often seen as the result of globalisation, the worldwide character of many phenomena, regulatory changes abolishing barriers to the development of markets (such as the limits on the scope of activity by an institution or restrictions as to the creation of new banks). In response to the pressure, banks are embarking on strategies aimed at increasing their efficiency. This creates a need for new research and in particular new performance analysis.

The paper deals with a method to measure the efficiency of operations in commercial banks which does not belong to the classical methods but is used in many countries as a valuable supplement to the traditional toolkit. The authors have calculated those efficiency measures for 34 Polish banks, based on the 1999 data.

Foreign literature of the subject distinguishes two basic models of the creation and flows of service in financial institutions. The first one, termed the "producer's model" treats the bank as a provider of services for the account holders. The other model, the "intermediary" one, perceives the bank as an institution which transfers financial assets between clients with surplus funds, interested in lodging them, and clients with shortage of funds looking for new sources of money.

The paper estimates the efficiency measures for commercial banks in Poland under both models. Both are found useful as a basis for the DEA supplementary method of measuring performance.

The banks in the analysed sample have achieved a relatively high average efficiency at the level of 79.98%. The value for the least efficient bank was 34.70%. Most of the banks concerned are characterised by decreasing or constant returns to scale, which means that further growth - i.e. more investment - would not improve or would even reduce their performance. The analysis of the measures for the respective banks shows that efficiency of Polish banks is greatly affected by the number of branches they hold. Foreign researchers do not consider this parameter a significant one; therefore it is not important whether a bank is seen as place to consume accumulated funds and to obtain banking services, or rather as a "black box" transforming outlays into effects. In the case of Poland the relationship may indicate that bank managers pursue an additional purpose - to build a network of branches. The purpose thus defined runs somewhat counter to the other aims of a bank, especially those assigned by their owners or clients.