• The Journal of Asian Finance, Economics and Business
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• 제8권1호
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• pp.841-850
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• 2021

This study aims to evaluate the relationship between bank capital, efficiency, and risk in Islamic banks. We use data from 129 Islamic banks in the world, retrieved from various data sources. We retrieved specific banking data from Moody's Analytics BankFocus and Thomson Reuters Eikon, while data at the country level was obtained from the World Bank website. This study uses various estimates both Pooled OLS (Ordinary Least Square) and Random Effect (RE). However, to overcome the issue of serial correlation which could cause bias in the results of the study, we used fixed-effect (FE) cluster estimates. The research results confirm the previous findings that bank capital positively affects bank stability (natural logarithm of Z-Score) and negatively affects credit risk (loan loss provision to total liabilities). The findings also show that efficiency has the same effect. The interaction test of bank capital and efficiency shows that efficiency encourages banks to reduce risk, including when bank capital is relatively lower. This finding is expected to have implications for the authorities to boost bank efficiency in addition to establishing several regulations related to capital. The efficiency implemented by the bank will encourage banks to act prudently so that the bank can maintain its performance through risk mitigation.

• 한국컴퓨터정보학회논문지
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• 제12권1호
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• pp.205-217
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• 2007

본 연구에서는 일반은행의 경영효율성 변화에 대한 분석을 하였다. DEA를 통하여 은행별 효율성을 규명한 후, 상대적으로 효율적인 은행과 비효율적인 은행으로 구분하였다. 비효율적인 은행에 대해서는 비효율적인 부문 및 정도를 파악하고자 하였으며, 효율성 개선방안의 제시와 BCC모형으로 은행의 규모가 경영효율성에 미치는 영향도 분석되어졌다. 또한, 시중은행과 지방은행간 효율성에 차이가 나타나는 가를 검증하였다. 분석 결과 시중은행과 지방은행 모두 2000년 이후 지속적인 경영효율성 개선을 보여주고 있으며, 시중은행의 경영효율성이 2000년을 제외하고는 지방은행보다 높은 것으로 나타났다. 시중은행과 지방은행간 자기자본비율을 제외한 검정변수에 있어서는 차이가 존재하는 것으로 나타났으며, 경영효율성 차이에서는 별다른 차이가 없음을 보여주고 있다. 규모가 경영효율성에 미치는 영향에서는 구조조정과 합병에 의한 규모의 효과가 없거나 오히려 부의 영향을 미치는 것으로 나타나고 있다.

• The Journal of Asian Finance, Economics and Business
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• 제8권1호
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• pp.751-758
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• 2021

This research is conducted to measure the efficiency level of Islamic banking in Indonesia and also to analyze the factors that can affect its efficiency level. This research used a purposive sampling technique to determine the sample size that will be used, with criteria that the bank has been operating since 2010 and consistently published its financial reports during the research period from 2011 until 2019; therefore, the total sample obtained was 11 samples. Analysis for efficiency level is done by using linear programming Stochastic Frontier Analysis (SFA), with test tool in the form of Frontier 4.1 and Eviews9 to find out what factors that affect efficiency. Efficiency test is done by involving input and output, while influence test used bank-specific variables comprising bank size, bank financial ratio, and macro-economy variable. Research result shows that there are only two banks that are almost close to being fully efficient firms, but the result still does not indicate that Islamic bank works efficiently. Results of the influence test show that factors affecting Islamic banking efficiency in Indonesia are bank size, Capital Adequacy Ratio (CAR), Non-Performing Finance (NPF), and Financing to Deposit Ratio (FDR), while other factors are not influential over the study period.

• The Journal of Asian Finance, Economics and Business
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• 제8권2호
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• pp.317-328
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• 2021

This study examines the impact of bank competition and efficiency in the financial stability of the banking sector in Bangladesh. The study used the Lerner index and the Boone indicator to represent the bank competition, while the non-performing loan (NPL) and Z-score are used to represent financial stability. The secondary data were collected from the annual reports of 28 DSE listed commercial banks of Bangladesh over the period from 2011 to 2018. Using a dynamic panel GMM model, the study found the Lerner index is significantly negatively related with Z-score, which means that higher bank competition results in higher bank stability. It is also seen that higher cost efficiency results in higher bank stability. The Lerner index has negative, but insignificant impact on NPL. Similarly, using the Boone indicator, this study found that lower competition increases NPL. In terms of the Z-score, the Boone indicator found that 1 unit of increment results in decrease of the Z-score by 6.15 units. The study suggests that, as more competition results in more financial soundness, the banking industry competition should be ensured by policymakers or regulators. Banks could enhance financial stability by cost control to achieve cost efficiency as well as by improving loan-to-asset ratio.

• 한국경영과학회지
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• 제26권3호
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• pp.39-52
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• 2001

Recently, the assessment of a bank efficiency focusing on its branches has been conceived as important in developing a competitive strategy. DEA (Data Envelopment Analysis) model can be employed as an effective analysis model for such an assessment. Therefore, this paper proposes an analysis process using DEA model to conduct an efficiency assessment of bank branches. The proposed process includes a segmentation of branches considering their competitive environment and strategy for target market : this approach can help to develop effective strategies for each group of branches. The proposed DEA model can analyze efficiency in terms of not only cost but also marketing. Finally, a real case is analyzed, demonstrating the effectiveness of the proposed model and process.

• The Journal of Asian Finance, Economics and Business
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• 제7권10호
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• pp.729-740
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• 2020

The study examines the efficiency of private sector banks in India with the help of Window DEA (Data Envelopment Analysis) for a period from 2005 to 2017. With a window of three years, the period was divided into 11 windows. The study outcomes show that 59.9% of all private sector banks in India operate at more than 0.9 level of efficiency, and there are only three occasions when banks were operating at the efficiency value between 0.6 to 0.7. Further, the consistency in the efficiency scores of the banks has also been analyzed using an efficiency mapping matrix, and the mean efficiency score of the bank in each window is studied. The score of standard deviation was interpreted accordingly for these banks. Banks that are showing the highest efficiency scores also have a higher variance of efficiency scores. There was no bank identified in the matrix that promises high-efficiency ratings with low variability. The study concludes that the analysis of the efficiency mapping matrix indicates that, as a DMU escalates in the efficiency scores, the standard deviation reflecting the risk in overall efficiency scores also tends to rise. The findings complement the concept of higher risk to higher return or greater efficiency.

• The Journal of Asian Finance, Economics and Business
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• 제10권1호
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• pp.123-132
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• 2023

This study seeks to determine if the efficiency of bank human resources, as played by human capital, impacts the performance and diversification of banks. This study uses secondary data from data obtained from 385 commercial banks in 33 countries in Asia during the 2010-2020 period with the diversification analysis method. We use the Z-score to measure the amount of standard deviation that must be from earnings (ROAA). We examined it using the Tobit regression technique. According to the regression estimation results, human capital has a significant role in the performance and effective diversification of Asian banks. The human capital efficiency coefficient (HCE) is significantly negative with the cost-to-income ratio (CTIR) and significantly positive with Profitability, Financial Stability, and cost efficiency score. The level of efficiency of human resources has an effective role in increasing human capital which has an impact on bank diversification and performance. The development of human resources in a human capital framework plays an important role in the diversification and improvement of bank performance. Human capital has a significant role in the performance and effective diversification of Asian banks. The level of efficiency of human resources has an effective role in increasing human capital which has an impact on bank diversification and performance.

• The Journal of Asian Finance, Economics and Business
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• 제4권3호
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• pp.19-26
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• 2017

Banks play a crucial role in bringing stability and economic development through their expected contribution in proper financial resource mobilisation across the economy. Despite the importance, there is little focus in recent literature which provided the empirical evidence how the global financial crisis affect the bank efficiency in Bangladesh. Thus, this paper aims to examine the effect of the global financial crisis and other factors on the efficiency of Bangladesh commercial banks. By employing the Data Envelopment Analysis (DEA) method, we computed the technical efficiency of individual banks operating in the Bangladesh banking sector during 2000 to 2013. The empirical findings indicate that the Bangladesh banking sector has exhibited the highest efficiency level during 2001, while efficiency seems to be at the lowest level during 2010. The study finds that crisis along with bank size, capital adequacy ratio, return on average equity and real interest rate have a significant effect on bank efficiency in Bangladesh. In order to keep the sound financial development of Bangladesh, banks operating in the Bangladesh banking sector have to consider all the potential technologies which could improve their profit efficiency levels, since the main motive of banks is to maximise shareholders' value or wealth through profit maximisation.

• 아태비즈니스연구
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• 제6권2호
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• pp.1-17
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• 2015

This study compares the most widely used parametric and non-parametric techniques to measure cost and profit efficiency of banks, namely the Stochastic Frontier Analysis (SFA) and Data Envelopment Analysis (DEA). We formulate the specification form of both stochastic cost and profit frontier models and constant return to scale Cost DEA and Profit DEA models and provide an empirical assessment of the cost and profit frontiers based on a panel dataset of National Commercial Banks (NCBs) and Private Banks (PBs) in Bangladesh over the 2001-2010 period. The cost inefficiency and profit efficiency are slightly higher for PBs than NCBs in case of both SFA and DEA. The coefficients of advance and off-balance sheet items are significant that positively influence the banks in stochastic cost frontier model while the advance, other earning assets, price of borrowed fund are significant and negative effects on the banks in stochastic profit frontier model. The average cost inefficiency and average profit efficiency are recorded with 16.3% and 91% respectively. The highest and lowest cost inefficiency are observed for Janata Bank and United Commercial Bank Limited whilst the highest and lowest profit efficiency are recorded for Eastern Bank Limited and Janata Bank respectively. The average technical and allocative efficiency are 68.8% and 35.9%, respectively in case of CRS cost-DEA model whereas they are 70.3% and 31.8% in case of CRS profit-DEA model. The average cost inefficiency is recorded 6.3% by SFA whereas it is 24.5% by DEA. The average profit efficiency is found 91% by SFA while it is 22.1% by DEA, and SFA method shows better bank efficiency than DEA.

• Industrial Engineering and Management Systems
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• 제14권4호
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• pp.347-371
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• 2015

A hybrid procedure based on multi-Criteria Satisfaction Analysis (MUSA) and a Network Data Envelopment Analysis (NDEA) is proposed to evaluate the relative efficiency of customer services in bank branches. First, a three-stage process including sub-processes such as customer expectations, customer satisfaction, and customer loyalty, is defined to model the banking customer services. Then, fulfillment of customer expectations, customer loyalty level, and the customer satisfaction degree are measured and quantified through a multi-dimensional questionnaire based on customers' perceptions analysis and MUSA method, respectively. The customer services scores and the other criteria such as mean of employee evaluation score, operation costs, assets, deposits, loans, number of accounts are considered in network three-stage DEA model. The proposed NDEA model is formed based on multipliers perspective, output-oriented, and constant return to scale assumptions. The proposed NDEA model quantifies and assesses the total efficiency of main process and assigns the efficiency to customer expectations, customer satisfactions, and customer loyalties sub-processes in bank branches. The whole procedure is applied on 30 bank branches in IRAN. The proposed approach can be used in other organizations such as airports, airline agencies, urban transportation systems, railway organizations, chain stores, chain restaurants, public libraries, and entertainment centers.