• The Journal of Asian Finance, Economics and Business
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• v.8 no.1
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• pp.741-750
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• 2021

The research aims to analyze the level of efficiency by grouping banks during the period 2017 - 2018 into category 1 and category 2 banks and then dividing them as Regional Development Banks (BPD) and Non-BPD Conventional Commercial Banks (BUK) within each category. The research objects are banks within the categories BPD and BUK comprised 18 BPDs and 35 BUKs. The research methodology uses 3 stages, first, using Data Envelopment Analysis (DEA) we measure the level of bank efficiency; second, using the Tobit regression model we evaluate the effect of financial performance on DEA efficiency, and third, using the Mann-Whitney test we determine whether there is a difference in the efficiency of category 1 and 2 banks. The results showed that there was a decrease in the efficiency of category 1 and 2 banks but on average, the efficiency of category 1 banks is higher than category 2 banks. The estimation results of the Tobit regression model show that only the ROA variable affects the efficiency level of category 1 banks, while category 2 banks are influenced by NPL and ROA variables. In the Mann-Whitney test, it was proven that there were differences in efficiency between BUK and BPD in category 1 and 2 banks.

• The Journal of Asian Finance, Economics and Business
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• v.8 no.4
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• pp.239-247
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• 2021

Conventional banks are often considered more efficient than Islamic banks because they have been operating for decades, but Islamic banks have shown rapid development recently. Therefore, this study mainly aims to compare the level of efficiency of conventional banks and Islamic banks and which ones have the best level of efficiency. This study employs panel data using Stochastic Frontier Analysis (SFA) as the data analysis technique. The data used is annual data from 13 conventional banks and 13 Islamic banks in Indonesia during the 2014-2019 period. The result shows no significant difference in the efficiency of conventional banks and Islamic banks. This result is presumably influenced by the small size of the bank and the total number of banks used in the study. The data used in the study is limited to the period from 2014 to 2019. The variables utilized are also limited to the availability of financial report data which is publicly published. This study provides additional empirical evidence regarding conventional banks' and Islamic banks' efficiency in Indonesian banking by using the latest data. While theoretically, Islamic banks are expected to be more efficient than conventional banks, this study did not find any strong support for the case in Indonesia during the observation period.

• Asian Journal of Business Environment
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• v.5 no.2
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• pp.5-13
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• 2015

Purpose - This paper aims to study the main selection criteria for Islamic banks in Indonesia, and to compare them with those for conventional banks. Research Design, Data, and Methodology - This study employs an exploratory approach and a natural experimental design with Factor Analysis and two independent sample tests as statistical analysis methods. A total of 363 questionnaires were distributed to three groups of bank customers-customers of Islamic and conventional banks individually, and those of both banks together (121 respondents in each group). Results - The research shows that service appears to be the most important factor in selecting Islamic banks, in addition to other emotional and rational factors. However, this service cannot be expressed as the Islamic banks' advantage compared to conventional banks, because the latter's customers also perceived service as the most important factor. The parametric mean of importance of service for both Islamic and conventional banks' customers is insignificantly different. Conclusion - Customers of both conventional and Islamic banks have a similar degree of importance for convenience, price, and service.

• Journal of Information Technology Applications and Management
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• v.29 no.2
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• pp.39-50
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• 2022

This research confirmed whether banks and saving banks increase their deposit margin under changes in the base rate. This paper has conclusions as follows. First, when the Bank of Korea changes the base rate, deposit rate variable are significant with panel analysis in the total data set and saving banks. This result implies that changes in the base rate affect deposit margin. Second, this study confirmed whether banks and saving banks maximize their deposit margin as base rate changes. As a result, when the Bank of Korea cut the base rate, the deposit margins of banks and saving banks decreased significantly. Still, their deposit margins are not statistically significant in the opposite situation. Therefore, this paper could not find evidence that banks and saving banks behave to maximize their deposit margin. Maybe, this phenomenon can appear because these financial institutions recognize this criticism.

• The Journal of Asian Finance, Economics and Business
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• v.7 no.11
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• pp.669-677
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• 2020

The study aims to compare the effects of employing investment deposits (joint and specified investment deposits) in Islamic banks, and investment deposits (term deposits and deposits with notification) at conventional banks, on shareholders' profitability, represented by the earnings per share (EPS), in light of operational profits as a controlling variable. Data related to the study variables was collected from the annual financial reports published by the study sample banks, during the period (2009-2018). The study relies on multiple regression to test the hypotheses of the study. The high adjusted R² to explain the change in EPS for Islamic banks model as compared to conventional banks, is a result of the high difference between investment deposits (specified and joint) at Jordanian Islamic banks and investment deposits (term deposits and deposits with notification) at Jordanian conventional banks. The study found that it is important for the managements of Islamic banks to adopt a uniform method to combine speculative funds, in order to develop and improve shareholders' profitability. The study recommended Islamic banks to follow practical, methodological and transparent approaches to calculate the rates of Murabaha profit margins between shareholders and depositors, while also taking into consideration some of the issues which could be harmful for the competition between Islamic and conventional banks.

• The Journal of Asian Finance, Economics and Business
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• v.6 no.4
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• pp.65-74
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• 2019

This study has two main purposes; first, it examines the effect of capital structure on profitability of Islamic and conventional banks; second, it determines that whether the capital structure of Islamic and conventional banks is same or not. A sample of ten banks was taken over the period 2006-2016. Independent samples T-test was used for finding the comparison between the capital structure of Islamic and conventional banks while for assessing the impact of capital structure on profitability, regression analysis (Fixed effects model) was used. Results showed that the capital structure of both types of banks was similar except for bank size which differed significantly. Moreover, ROA was negatively correlated to the capital structure of both conventional and Islamic banks. In contrast, ROE was positively correlated to the capital structure of both conventional and Islamic banks. In addition to that, two explanatory variables were positively correlated while two were negatively correlated to EPS for both Islamic and conventional banks. This study proves the existence of prominent theories of capital structure (pecking order theory and trade-off theory) for both conventional and Islamic banks in Pakistan and also validates the economies of scale.

• Asia-Pacific Journal of Business
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• v.5 no.1
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• pp.33-41
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• 2014

Since depositors are motivated by returns, it is important for Islamic banks management to understand the extent that rates of return on deposits influence their customers' decision to deposit. The main objective of the study is to explore the degree of influence of conventional bank's interest rate on Islamic bank's profitability and vice-versa. It has been seen from 2005 to 2011 that the rate of interest declared on deposit by conventional banks has a negative impact on profitability of both types of banks in Bangladesh. Rate of profit declared on deposit by Islamic banks is positively related with their profit earned but negatively related with profit earned by conventional banks. We see that rate of interest declared on deposit by Conventional Banks is positively related with their deposit volume but negatively related with Islamic Bank's deposit. On the other hand, rate of profit declared on deposit by Islamic Banks is negatively related with deposit levels of both types of banks. The survey result shows that almost 85% of the respondents are choosing Islamic banks only from their religious point of view and more than 60% of the sampled Islamic bank customers are reluctant to leave the bank even if conventional banks offer better interest rates.

• The Journal of Asian Finance, Economics and Business
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• v.9 no.7
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• pp.53-62
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• 2022

Commercial banks have a significant impact on the economy of Vietnam because they provide the majority of transactional capital. Therefore, the operational efficiency of commercial banks is a viral topic for the study of the Vietnamese banking system. The research aims to examine the efficiency and inefficiency of joint-stock commercial banks in Vietnam from 2016 to 2020 and then classify them into the efficient group and inefficient group. The study employs the time series data of 29 joint-stock commercial banks during the period 2016-2020. Based on the data collected from the annual audited financial statements of 29 Vietnamese joint-stock commercial banks, the authors select input and output variables for the standard DEA models and anti-efficient DEA models. This research uses two stages, first, by applying the standard DEA model, we investigate the efficient banks; second, by employing the anti-efficient DEA model, we find out the inefficient banks. The results reveal that the average efficiency score of 29 joint-stock commercial banks tends to increase in the period 2016-2018 and decrease gradually in the period 2019-2020. The findings of this study suggest that several small and medium-sized banks in the Vietnamese banking sector have both promising and risky performances and the efficiency of state-owned commercial banks has also improved significantly during the study period.

• International Area Studies Review
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• v.16 no.3
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• pp.99-118
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• 2012

This study have done comparative analysis of Korean banks' restructure and Chinese banks' reformation, especially derives main factors that influence existence and improvement of competitiveness of Korean banks. The study measured effectiveness of 15 Chinese banks and 13 Korean banks, and conducted empirical analysis of what are the factors affect the efficiency of banks. The result and implication are as follow. First, Korean commercial banks' efficiency is higher than banks in China, but Chinese commercial banks are getting better every year. Second, as the factors affect efficiency of the banks, it shows that the scale of bank, asset reliabilities, ownership structure and financial performance are significant. Third, about the factors affect efficiency, the ownership structure, financial intermediation ratio, and the health of the assets are significant in Chinese banks. Fourth, about the factors affect efficiency, the financial performance and asset reliability are significant in Korean banks. Based on the results, we have identified current problems of Chinese and Korean banks, and also pointed out Korean banks and Government how to improve competitiveness of Bank industry.

• The Journal of Asian Finance, Economics and Business
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• v.7 no.12
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• pp.85-93
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• 2020

This study aimed to explore the impact of macroeconomic (Real GDP growth (GDPG), Inflation rate (INF)) and bank -specific variables (profitability (ROA), capital adequacy (CADEQ), non-performing loans (NPL), deposit growth (DEPG)) on the liquidity (lIQ) of 13 listed Jordanian commercial banks for the period 2011-2018. Panel data analysis, Pooled least square, fixed effects model and random effects model, Lagrange multiplier test, and Hausman test were used. The random effects model output shows that, macroeconomic variables have a significant impact on Jordanian commercial banks liquidity since inflation has a positive impact while GDPG has a negative impact on banks (LIQ). On the other hand among the bank-specific variables capital adequacy and deposit growth have a positive significant impact on banks (LIQ), while (NPL) and (SIZE) have a negative significant impact on Jordanian commercial banks liquidity. But ROA has a negative insignificant impact on (LIQ). The findings of the study suggest that commercial banks departments need to pay attention to the economic and internal variables of banks in order to maintain acceptable levels of liquidity.