A Study on the Performance Evaluation of Taiwan’s Newly Reorganized Banks1

All companies face problems in their operation, just like human body. Yet, most problems elicit warning signals during the early stage. If we could conduct　simple diagnosis or measurement for the company, we could early detect the problem before they become unmanageable, and could map out corresponding　plans to cope with it. In this paper, we applied two mathematical tools, Grey Relation Analysis (GRA) and Data Envelopment Analysis (DEA), to evaluate the　performance of commercial banks newly reorganized from trust businesses in Taiwan. Both methods have limitations in application as well as respective　advantages and disadvantages. Analysis and comparison of the GRA and DEA when applied to the evaluation of performance are discussed. The empirical　result shows that the rankings of the three firms in the empirical study by using DEA and GRA are the same: first, the United World Chinese Bank, second, China Trust Commercial Bank, and third, Chinfon Bank.