OPERATIONAL RESILIENCE AND EFFICIENCY TRENDS OF MALAYSIAN FULL-FLEDGED ISLAMIC BANKS: A DEA ANALYSIS (2018–2023)
DOI:
https://doi.org/10.35631/AIJBES.829044Keywords:
Banks Efficiency, CCR Model, Covid-19, DEA, Islamic BanksAbstract
This study investigates the operational performance and relative technical efficiency of selected Malaysian full-fledged Islamic banks from 2018 to 2023. While prior studies have addressed Islamic banking efficiency, limited empirical research addresses how dedicated full-fledged Islamic banks maintained operational technical efficiency across specific crisis phases. Using the input-oriented Charnes-Cooper-Rhodes (CCR) Data Envelopment Analysis (DEA) model under an intermediation framework, this study evaluates relative technical efficiency using three inputs (Total Assets, Labour Costs, and Third-Party Funds) and two outputs (Total Financing and Operating Revenue). The evaluation covers three explicit periods: pre-COVID-19 (2018–2019), during COVID-19 (2020–2021), and post-COVID-19 (2022–2023). The sample consists of four standalone full-fledged operating Islamic banks: Bank Islam Malaysia Berhad, Bank Muamalat Malaysia Berhad, Bank Rakyat, and MBSB Bank Berhad. Empirical findings indicate that Bank Islam Malaysia Berhad and MBSB Bank Berhad maintained score-level consistency on the estimated efficient frontier throughout the six years. Bank Rakyat and Bank Muamalat Malaysia Berhad displayed minor fluctuations but achieved or recovered to full efficiency in the post-pandemic period. Rather than demonstrating absolute resilience or broad sector-wide stability, these relative results suggest that the sampled institutions successfully adapted input allocation relative to financial output generation across macroeconomic disruptions.
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