Abstract: Banking is still the pillar industry of the financial system in china and plays a pivotal role in the development of both China’s real and virtual economy. As the reform of China’s financial industry and the emergence of various new types of financial enterprises, the banking environment in China has become increasingly competitive. In this circumstance, measuring the bank efficiency accurately can help the managers understand the overall situation of banking and formulate measures effectively to improve the bank's core competitiveness and operational efficiency. To reasonably evaluate the operational performance of Chinese commercial banks, the operational process of commercial bank is divided into three serial stages: Capital raising, capital allocation, and profitability. Among them, the profitability stage is further divided into two parallel sub-stages: Lending and investment. Then, a three-stage dynamic SBM-DEA model with a nested parallel structure is constructed, in which the undesired output is considered. Subsequently, the proposed model is employed to evaluate the multi-period operational performance and annual operational performance of 25 Chinese commercial banks from 2015 to 2019. Finally, based on the above evaluations, an in-depth analysis for the overall operating situations, performance changes and performance influencing factors of the 25 commercial banks from 2015 to 2019 is performed. The main conclusions are as follows: 1) About 70% of the sample banks’ overall operational performances are below average. The reason for inefficiency of the overall operational performance for banks mainly originates from the two sub-stages of capital raising and profitability. The capital-raising efficiency of the state-owned bank is significantly higher than that of the joint-stock bank and the city commercial bank, but its profit efficiency is the lowest among the three types of banks. The situation of the city commercial bank is just opposite to that of the state-owned bank. 2) The investment efficiency is significantly higher than the lending efficiency, but there is a significant positive correlation between them. 3) The overall operational performance of Chinese commercial banks is generally declining during the period of 2015-2019, but the changing trends of the performance in each sub-stage are different. 4) In addition to the evaluation indicators, the rate of return on equity and the asset size have a significant positive impact on the overall operational performance of banks, while capital adequacy ratio, and fee and commission expense have a significant negative impact on that of banks.

Key words: commercial banks; operational performance; dynamic three-stage SBM-DEA model; undesired output; parallel structure