The efficiency of Islamic banks in Malaysia: Based on DEA and Malmquist productivity index

Basri, Mohd Faizal; Muhamat, Amirul Afif; Jaafar, Mohamad Nizam

doi:10.24191/jeeir.v6i3.8784

Cited by 8 publications

(13 citation statements)

References 15 publications

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“…However, among the samples in this study, only SDB is considered technically efficient for each input and output usage together with scale efficiency. DFIs with lower scale efficiency such as CGC, MIDF and Bank Rakyat should hire fewer employees and place a greater emphasis on hiring higher-quality employees rather than depending on quantity as suggested by Basri, et al [33].…”

Section: Discussionmentioning

confidence: 99%

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Technical Efficiency of Development Financial Institutions in Malaysia

Hashim¹,

Basri²,

Hussin³

2021

ujaf

Self Cite

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This study aims to identify the technical efficiency of Development Financial Institutions (DFIs) in Malaysia with the selected inputs of fixed asset and labour. Meanwhile, the output used in the study is financing. DFI is an institution that plays an important role in socio-economic development under the supervision of Bank Negara Malaysia (BNM). Using annual data from 2009 to 2018, technical efficiency is analysed using Data Envelopment Analysis (DEA) on the ten institutions selected in the DFIs. DEA results show that Sabah Development Bank Berhad (SDB) is the only institution considered as the most efficient. The rest of DFIs in the sample were deemed technical inefficient. The results also indicate that inefficient institutions including those with the lowest performance which are Credit Guarantee Corporation (CGC), Bank Pertanian Malaysia Berhad (Agrobank) and Bank Simpanan Nasional (BSN) have inefficient management in resource utilisation. Thus, activities in the operation of DFIs need to follow the law of return to scale for input and output orientation so that resources can be managed efficiently.

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Section: Discussionmentioning

confidence: 99%

“…Basri, et al [33] looked into the efficiency of Malaysia's domestic and foreign Islamic banks. Total financing (loans) and other earning assets were chosen as the study's outputs, while total deposits (deposits and short-term funding), personnel expenses, and total equity were employed as inputs.…”

Section: Dea Analysis In Dfismentioning

confidence: 99%

Technical Efficiency of Development Financial Institutions in Malaysia

Hashim¹,

Basri²,

Hussin³

2021

ujaf

Self Cite

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“…Furthermore, high operational expenses and unproductive employees also have a significant contribution to Islamic bank efficiency (Wanke et al, 2019). The scale of Islamic banks in Southeast Asia allows for greater efficiency in producing tiny amounts of output from little amounts of input (Basri et al, 2018). Moreover, the efficiency of Islamic banks has improved with time.…”

Section: Literature Review and Hypotheses Developmentmentioning

confidence: 99%

Indonesian Islamic banks: A review of the financial state before and after the COVID-19 pandemic

Lantara

Junaidi²,

Rauf

et al. 2022

Banks and Bank Systems

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Banking plays an important role in business and economic growth. However, since a couple decades ago, there have been issues with efficiency and performance. This paper aims to examine Indonesia’s Islamic banking performance through non-parametric production efficiency analysis before and after the COVID-19 pandemic, 2010–2021. This study differentiated between different dimensions of Indonesia’s Islamic banks (IIB) finance and non-finance aspects, as well as investigated the relationships between these dimensions of finance, including assets, deposits, equity, financing, and income, and non-financial variables, namely employees and offices. Non-parametric analysis, with the input-oriented variable constant return to scale (CRS) and returns to scale (VRS) models as a framework, data envelopment analysis (DEA) is used to calculate the IIB of overall, pure, and scale efficiency. However, the resources of technology IIB management are lacking, as well as macroeconomic and environmental effects. This study found that IIB operational needs to enhance investment in technology beyond the office. This means that the number of offices has a smaller impact on enhancing deposits and revenue. Technology investment has a crucial role in enhancing IIB equity, income, and innovation service. As a result, IIB managers and policymakers must improve their efficiency scores in order to increase competition and innovation. Furthermore, IIB needs to increase and spend their assets and experience to enhance technology, which significantly affects efficiency.

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“…11) Basri et.al. [40], study the efficiency of 16 show the negative effect of (NPLs) on the performance of Turkish banks. 9) Sharifa et.al.…”

Section: Dea Applications Papers In Banking Sector Publish In Yearmentioning

confidence: 99%

Data Envelopment Analysis Recent Applications in Banking Sector: A Survey

Kumari¹

2019

IJRASET

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The present study review and surveys the number of research papers based on the applications of Data Envelopment Analysis (DEA) in the banking sector. This study focus on the development of DEA application only in the banking sector and includes the papers from 2016 to 2019, which published in reputed journals. Data envelopment analysis is one of the most effective and popular methods applied to measuring efficiency of banking sector. The author made a search for DEA application in banking industry related papers in Google Scholar database. The number of papers I get is rather impressive. I select the recent papers on DEA application.

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The efficiency of Islamic banks in Malaysia: Based on DEA and Malmquist productivity index

Cited by 8 publications

References 15 publications

Technical Efficiency of Development Financial Institutions in Malaysia

Technical Efficiency of Development Financial Institutions in Malaysia

Indonesian Islamic banks: A review of the financial state before and after the COVID-19 pandemic

Data Envelopment Analysis Recent Applications in Banking Sector: A Survey

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