The impact of the covid-19 pandemic on the efficiency performance of Islamic Banks in Indonesia: A two-stage data envelopment analysis approach
Abstract
Islamic banking plays an essential role in the economy. Additionally, resilience to crises makes Islamic banking one of the leading solutions to overcoming the economic crisis. This research aims to analyze the level of performance of Islamic banking in Indonesia and determining factors, including the impact of the COVID-19 pandemic during the 2011-2022 period, uses 11 Islamic Commercial Banks (BUS) in Indonesia. The analysis method used is DEA Two Stage, with secondary data from the financial reports of each BUS. The input variables are fixed assets, labor costs, and third-party funds. The output variables are the amount of financing provided and operational income. The research results explain that no Islamic Commercial Banks (BUS) in Indonesia achieved optimal efficiency during the research period. Then, the level of BUS efficiency in Indonesia during the research period fluctuated from year to year. Furthermore, the Covid-19 pandemic has had an impact on the level of BUS efficiency in Indonesia. In the potential improvement analysis, known that the most significant source of inefficiency comes from the output variable, namely the amount of financing provided. The results of the benchmarking analysis found BUS with the most references, where the year most referred to was 2021-2022.
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