AbstractThis paper analyzes technical and scale efficiency of Austrian savings and cooperative banks. Non‐profit objectives are also considered with respect to input–output choice, which contributes to adequate performance measurements for alternative banks. Efficiency score estimates obtained via Data Envelopment Analysis (DEA) reveal considerable potential for improvement in terms of intermediation efficiency. Several environmental determinants prove significant, but the cumulative predictive content of exogenous factors is rather modest. Bank efficiency improves in both underdeveloped and prosperous markets, while increased rival size and distance appear to be detriments to efficiency. A concluding discussion of confounding factors reveals the managerial, stakeholder, and policy implications of the results.