Annals of Management and Organization Research
Vol. 4 No. 3 (2023): February

The profit efficiency analysis of malaysian commercial banks: A Data Envelopment Analysis (DEA)

Nursyazfaliana Mohd Arif (Faculty of Business and Management Universiti Teknologi MARA, Sabah Branch, Kota Kinabalu Campus, Malaysia)
Ayunazira Nasir (Faculty of Business and Management Universiti Teknologi MARA, Sabah Branch, Kota Kinabalu Campus, Malaysia)
Rakin Syuwari Rodrigo (Faculty of Business and Management Universiti Teknologi MARA, Sabah Branch, Kota Kinabalu Campus, Malaysia)
Imbarine Bujang (Faculty of Business and Management Universiti Teknologi MARA, Sabah Branch, Kota Kinabalu Campus, Malaysia)
Siti Julea Supar (Faculty of Business and Management Universiti Teknologi MARA, Sabah Branch, Kota Kinabalu Campus, Malaysia)



Article Info

Publish Date
30 Aug 2023

Abstract

Purpose: This study aims to measure and compare the profit efficiency of local and international commercial banks in Malaysia before and during the COVID-19 pandemic in accordance with the new Basel Committee III guidelines, which mandate banks to adopt a systematic approach to deal with uncertain economic conditions, including events such as the COVID-19 pandemic. Research methodology: This study uses Data Envelopment Analysis (DEA), a non-parametric method based on linear mathematical programming, to measure the efficiency of local and international commercial banks in Malaysia. Results: The analysis revealed that local international commercial banks were more efficient than local commercial banks before and during the COVID-19 crisis. Limitations: Potential areas for future research involve extending the application of Data Envelopment Analysis (DEA) and examining various dimensions and metrics about different countries, as each country possesses distinct financial contexts. Contribution: This study contributes to the existing body of literature on the profit efficiency of local and international banks. It provides insights that can assist the government in formulating appropriate regulations to enhance banks’ profit efficiency, thereby improving their overall performance.

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Journal Info

Abbrev

amor

Publisher

Subject

Economics, Econometrics & Finance

Description

The Annals of Management and Organization Research (AMOR) is an international, peer-reviewed, and scholarly journal that publishes high-quality research articles covering qualitative and quantitative research discussing interesting and contemporary topics on all areas of management and organization ...