Islamic bank efficiency: an efficiency method with SFA
Judging from the financial ratios, the performance of Islamic banking in Indonesia was remarkably stable both before and during the Covid-19 pandemic. However, another thing is whether this condition could make Islamic banks continue to work effectively. This study aimed to measure the cost efficie...
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| Format: | Article |
| Language: | English |
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Master Program in Economics, Graduate Program of Universitas Jambi
2023-02-01
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| Series: | Jurnal Perspektif Pembiayaan dan Pembangunan Daerah |
| Subjects: | |
| Online Access: | https://online-journal.unja.ac.id/JES/article/view/18250 |
| _version_ | 1797894015749718016 |
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| author | Fajra Octrina Hariadi Eka Priatmojo |
| author_facet | Fajra Octrina Hariadi Eka Priatmojo |
| author_sort | Fajra Octrina |
| collection | DOAJ |
| description |
Judging from the financial ratios, the performance of Islamic banking in Indonesia was remarkably stable both before and during the Covid-19 pandemic. However, another thing is whether this condition could make Islamic banks continue to work effectively. This study aimed to measure the cost efficiency of Islamic commercial banks in Indonesia quarter I of 2019 – quarter IV of 2020 and analyze the influencing factors in cost efficiency. The study used a saturated sampling technique with a total sample of 14 Islamic commercial banks, while the efficiency level was determined using the Stochastic Frontier Analysis (SFA) method. It turns out that PT. Bank Muamalat Indonesia Tbk. has the highest efficiency value of 0.9284. Several banks with an efficiency value of more than 0.5 are PT. Bank Aceh Syariah, PT. Bank BNI Syariah, and PT. Bank Mega Syariah. In this study, only inflation variables affect efficiency. In contrast, bank size, Return on Assets (ROA), Net Operating Margin (NOM), Non-Performing Financing (NPF), Financing to Deposit Ratio (FDR) variables, Capital Adequacy Ratio (CAR), Gross Domestic Product (GDP), and the rupiah exchange rate don’t affect the efficiency. Overall, all the company's internal variables and environmental variables affect efficiency.
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| first_indexed | 2024-04-10T07:02:06Z |
| format | Article |
| id | doaj.art-c70f648794a54e728544c3ae1bfd0ce0 |
| institution | Directory Open Access Journal |
| issn | 2338-4603 2355-8520 |
| language | English |
| last_indexed | 2024-04-10T07:02:06Z |
| publishDate | 2023-02-01 |
| publisher | Master Program in Economics, Graduate Program of Universitas Jambi |
| record_format | Article |
| series | Jurnal Perspektif Pembiayaan dan Pembangunan Daerah |
| spelling | doaj.art-c70f648794a54e728544c3ae1bfd0ce02023-02-27T17:29:54ZengMaster Program in Economics, Graduate Program of Universitas JambiJurnal Perspektif Pembiayaan dan Pembangunan Daerah2338-46032355-85202023-02-0110610.22437/ppd.v10i6.18250Islamic bank efficiency: an efficiency method with SFAFajra Octrina0Hariadi Eka Priatmojo1Study Program of Management Business Telecommunication and Informatics (MBTI), School of Economics and Business, Telkom University, IndonesiaStudy Program of Management Business Telecommunication and Informatics (MBTI), School of Economics and Business, Telkom University, Indonesia Judging from the financial ratios, the performance of Islamic banking in Indonesia was remarkably stable both before and during the Covid-19 pandemic. However, another thing is whether this condition could make Islamic banks continue to work effectively. This study aimed to measure the cost efficiency of Islamic commercial banks in Indonesia quarter I of 2019 – quarter IV of 2020 and analyze the influencing factors in cost efficiency. The study used a saturated sampling technique with a total sample of 14 Islamic commercial banks, while the efficiency level was determined using the Stochastic Frontier Analysis (SFA) method. It turns out that PT. Bank Muamalat Indonesia Tbk. has the highest efficiency value of 0.9284. Several banks with an efficiency value of more than 0.5 are PT. Bank Aceh Syariah, PT. Bank BNI Syariah, and PT. Bank Mega Syariah. In this study, only inflation variables affect efficiency. In contrast, bank size, Return on Assets (ROA), Net Operating Margin (NOM), Non-Performing Financing (NPF), Financing to Deposit Ratio (FDR) variables, Capital Adequacy Ratio (CAR), Gross Domestic Product (GDP), and the rupiah exchange rate don’t affect the efficiency. Overall, all the company's internal variables and environmental variables affect efficiency. https://online-journal.unja.ac.id/JES/article/view/18250Cost efficiencyIslamic bankStochastic Frontier Analysis |
| spellingShingle | Fajra Octrina Hariadi Eka Priatmojo Islamic bank efficiency: an efficiency method with SFA Jurnal Perspektif Pembiayaan dan Pembangunan Daerah Cost efficiency Islamic bank Stochastic Frontier Analysis |
| title | Islamic bank efficiency: an efficiency method with SFA |
| title_full | Islamic bank efficiency: an efficiency method with SFA |
| title_fullStr | Islamic bank efficiency: an efficiency method with SFA |
| title_full_unstemmed | Islamic bank efficiency: an efficiency method with SFA |
| title_short | Islamic bank efficiency: an efficiency method with SFA |
| title_sort | islamic bank efficiency an efficiency method with sfa |
| topic | Cost efficiency Islamic bank Stochastic Frontier Analysis |
| url | https://online-journal.unja.ac.id/JES/article/view/18250 |
| work_keys_str_mv | AT fajraoctrina islamicbankefficiencyanefficiencymethodwithsfa AT hariadiekapriatmojo islamicbankefficiencyanefficiencymethodwithsfa |