Islamic Banking Efficiency: Comparative Studies Between Malaysia and Indonesia

Yulita, Ika; Rizal, Sofyan

doi:10.15408/sjie.v5i1.3129

Cited by 6 publications

(6 citation statements)

References 4 publications

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“…Sukmana and Suryaningtyas (2016) confirm that the role of capital and bank's performance to the banking liquidity. However, according to Yulita and Rizal (2016)…”

Section: Discussionmentioning

confidence: 99%

Liquidity and Capital of Islamic Banks in Indonesia

Hosen

Muhari

2017

Signifikan

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This study is aimed to analyzed the factors that affect the liquidity and capital of Islamic banks in Indonesia. The method is used multiple linear regression. This result shows that the main problem of Islamic banks in Indonesia is how to increase equity in line with increasing third party fund. Another problem is that Islamic bank face difficulties to find debt for solving liquidity problem due to lack of instruments for liquidity derivative. Therefore Islamic banks rely on third party funds, which are high cost of funds due to time deposit fund, rather than using current deposit and saving deposit fund. Another result, negative coefficient of Gross Domestic Product (GDP) to Quick Ratio (QR) indicate that if macroeconomics of Indonesia is stable and good environment, Islamic banks will expansive the market, meanwhile Islamic banks have now low level of liquidity buffer. This means Islamic banks face high level of risk, if core depositors withdraw money rushly it became defaultDOI: 10.15408/sjie.v6i1.4405

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“…Sukmana and Suryaningtyas (2016) confirm that the role of capital and bank's performance to the banking liquidity. However, according to Yulita and Rizal (2016)…”

Section: Discussionmentioning

confidence: 99%

Liquidity and Capital of Islamic Banks in Indonesia

Hosen

Muhari

2017

Signifikan

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“…CRS efficiency assumes that the change of value in the inputs is also proportional to the change in the outputs. Adversely, VRS efficiency assumes that changes in outputs are not proportional to the changes in the inputs, the resulting outputs may be smaller or larger than the inputs (Yulita & Rizal, 2016). This study uses output-oriented calculation with input variables consist of third party funds (DPK), operational cost (BIOP), and total financing (TFUND).…”

Section: Methodsmentioning

confidence: 99%

“…A study conducted by Yulita & Rizal (2016) showed that Indonesian Islamic banks are more efficient than Malaysian Islamic banks in the period of the first quarter of 2011 until the fourth quarter of 2014, the analysis were done using DEA with the inputs of third party funds (DPK), fixed assets, and operational costs, with the outputs of total financing and total operating income. Another study conducted by Rodoni et al (2017) found that Indonesian and Malaysian Islamic Banking Industry is inefficient and the banks' condition in Indonesia is worse than Malaysia, their study is also using DEA as the method to measure efficiency within five years average of 2009-2013.…”

Section: Literature Reviewmentioning

confidence: 99%

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Projection of Indonesian Islamic commercial banks efficiency and stability in the Covid-19 period using DEA and panel ARDL

Himmawan

Firdausi

2021

JEKI

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Purpose -This study aims to assess the efficiency and stability of Indonesia Islamic Commercial Banks, and then the results are used as a projection in the Covid-19 period. It uses the sample from 14 Islamic Commercial Banks in Indonesia and its quarterly data from 2017 to 2020.Methodology -The DEA method analyses VRS and CRS scale using output orientation. The Panel ARDL also uses two models from the specifications in DEA, with the inputs as independent variables and the outputs as dependent variables.Findings -The result of DEA is visualized in four quadrants from each CRS and VRS model. Respectively in each model, 1 and 5 banks are highly efficient and stable, 5 and 2 banks have high efficiency but low stability, 4 and 2 banks have low efficiency but high stability, 4 and 5 banks have low efficiency and stability. In the Panel ARDL, third party fund, operational expenses, and total financing have significant and stable long-run effect in both models. In the short-run, only operational expenses significantly affect operational earnings, whereas only total financing significantly affects total assets.Practical implications -Banks may use strategies such as absorbing workforces as marketing representatives, utilizing cooperative agreements, crowdfunding, improving banking technology, creating provisions on expected credit loss, and deferring profit.Research limitations -The limitation of this study is the small sample size because only 14 Islamic commercial banks are used as the sample, without considering the Islamic business units of the conventional banks so the predictive strength of the result only constrained in the Islamic commercial banks.Originality -The study uses two different methods in assessing Islamic Commercial Banks especially in the Covid-19 period, hence adding insights on Islamic Commercial Banks in the pandemic period and further contributes to the Islamic banking field of study.

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“…CRS efficiency assumes that the change of value in the inputs is also proportional to the change in the outputs. Adversely, VRS efficiency assumes that changes in outputs are not proportional to the changes in the inputs, the resulting outputs may be smaller or larger than the inputs (Yulita, I;Rizal, 2016). The variables used as input and output are shown in Table 2.…”

Section: Methodsmentioning

confidence: 99%

Digitalization and Efficiency: Technology-based Service of Indonesia Sharia Commercial Banks

Bella

Himmawan

2021

IQTISHADIA

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This study aims to assess the technology-based service effectiveness on bank profitability as well as to evaluate the efficiency and stability of Islamic Commercial Banks in Indonesia. The model was analyzed by using multiple linear regressions with generalized least square estimation technique and Data Envelopment Analysis (DEA) with data are gathered from Q1 2017 to Q2 2020. The exogenous variables included were Branchless Banking (BB), Third-party Funds (DPK), and Technology Service Quality (TSQ), with banking operational income (PENDOP) as endogenous variable. The DEA method analyses the VRS and CRS scale while using output orientation. Using the inputs of DPK, operational expenses, and total funding, with the outputs of operational earnings and total assets. The main finding suggests that DPK played as a dominant variable, following by TSQ and BB on bank operational income. Moreover, the results of the DEA models showed in four quadrants in each CRS and VRS model. Respectively, 1 and 5 banks are highly efficient and stable, 5 and 2 banks have high efficiency but low stability, 4 and 2 banks have low efficiency but high stability, 4 and 5 banks have low efficiency and stability in the CRS and VRS model.

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Islamic Banking Efficiency: Comparative Studies Between Malaysia and Indonesia

Cited by 6 publications

References 4 publications

Liquidity and Capital of Islamic Banks in Indonesia

Liquidity and Capital of Islamic Banks in Indonesia

Projection of Indonesian Islamic commercial banks efficiency and stability in the Covid-19 period using DEA and panel ARDL

Digitalization and Efficiency: Technology-based Service of Indonesia Sharia Commercial Banks

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