THE DETERMINANTS OF BANK'S EFFICIENCY IN INDONESIA
Keywords:
Banking, efficiency, panel estimation, Indonesia
Abstract
This paper measures the efficiency of the banks using the intermediation approach and the Data Envelopment Analysis (DEA) on quarterly data of 108 conventional banks in Indonesia during the period of 2012Q1 to 2014Q4. The results shows that the Indonesian banking industry is inefficient in its intermediation function, which is in line with their financial indicators namely the total increasing asset, stable ROA of around 2-3%, and their Operating to Income Cost ratio of about 66-83%. Furthermore, we apply data panel estimation to estimate the determinant of this efficiency; the result shows the bank’s type, the Non Performing Loan (NPL), the Loan to Deposit Ratio (LDR), the size of the bank, the Cost Efficiency Ratio (CER), and the Capital Adequacy Ratio (CAR); significantly affect the bank’s efficiency in Indonesia.
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References
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Berger, Allen N dan DeYoung, Robert. (1997). Problem Loans and Cost Efficiency in Commercial Banks. Journal of Banking & Finance, 21(6), hal.849-870.
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Berger, Allen N dan Mester, Loretta J. (1997). Inside the Black Box: What Explains Differences in the Efficiencies of Financial Institutions?. Journal of Banking & Finance, 21(7), hal.895-947.
Boahene, Samuel Hymore, Dasah, Julius dan Agyei, Samuel Kwaku. (2012). Credit Risk and Profitability of Selected Banks in Ghana. Research Journal of Finance and Accounting, 3(7), hal.6-14.
Bonin, John P, Hasan, Iftekhar dan Wachtel, Paul. (2005). Bank Performance, Efficiency and Ownership in Transition Countries. Journal of Banking & Finance, 29(1), hal.31-53
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Lestari, Etty Puji. (2001). Efisiensi Teknik Perbankan di Indonesia Tahun 1995-1999: Aplikasi Data Enverlopment Analysis. [Tesis]. Universitas Gadjah Mada.
Mansyur, Fakhruddin. (2012). Analisis Perbandingan Efisiensi Bank Umum Syariah dan Bank Umum Konvensional di Indonesia Menggunakan Metode Stochastic Frontier Approach (SFA). UIN Sunan Kalijaga.
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Omar, Mohd Azmi, Rahman, Abdul Rahim Abdul, Yusof, Rosylin Mohd, Majid, M Shabri Abd dan Rasid. (2006). MESM. Efficiency of Commercial Banks in Malaysia. Asian Academy of Management Journal of Accounting and Finance, 2(2), hal.19-42.
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Prasnanugraha, Ponttie. (2007). Analisis Pengaruh Rasio-Rasio Keuangan terhadap Kinerja Bank Umum di Indonesia (Studi Empiris Bank-Bank Umum yang Beroperasi di Indonesia). [Skripsi]. Semarang: Universitas Diponegoro.
Roman, Angela dan Şargu, Alina Camelia. (2013). Analysing the Financial Soundness of the Commercial Banks in Romania: an Approach Based on the Camels Framework. Procedia Economics and Finance, 6, hal.703-712.
Rusydiana, Aam S dan Devi, Abrista. (2013). Challenges in Developing Baitul Maal wat Tamwiil (BMT) in Indonesia using Analytic Network Process (ANP).
Sarjana I. (2014). Pengaturan batas waktu pendaftaran jaminan fidusia pada undang-undang nomor 42 tahun 1999. Jurnal Magister Hukum Udayana, 5(1).
Siamat, Dahlan. (2005). Manajemen Lembaga Keuangan: Kebijakan Moneter & Perbankan- 5/E.
Sok-Gee, Chan. (2011). Technical Efficiency of Commercial Banks in China: Decomposition into Pure Technical and Scale Efficiency. International Journal of China Studies, 2(1), hal.27.
Stanton, AWB, Badger, C dan Sitzia, J. (2000). Non-invasive Assessment of the Lymphedematous Limb. Lymphology, 33(3), hal.122-135.
Subandi dan Ghozali, Imam. (2013). Determinan Efisiensi dan Dampaknya Terhadap Kinerja Profitabilitas Industri Perbankan di Indonesia. Jurnal Keuangan dan Perbankan, 17(1), hal.123-135.
Supriyono, Edy. (2007). Penggunaan Pendekatan Service Gap untuk Pengukuran Pandangan Manajemen Berkenaan dengan Efektifitas Sistem Informasi Akuntansi Bank, pada Bank Pemerintah di Jawa Tengah. Diponegoro University.
Suyono, Agus. (2005). Analisis Rasio-Rasio Bank yang Berpengaruh terhadap Return on Asset (ROA). [Tesis]. Semarang: Universitas Diponegoro.
Tang, Helena, Zoli, Edda dan Klytchnikova, Irina. (2000). Banking Crises in Transition Economies: Fiscal Costs and Related Issues. World Bank Policy Research Working Paper, (2484).
Warganegara, Akmal Rangga Putra. (2011). Determinan Net Interest Margin Industri Perbankan Indonesia. [Tesis]. Jakarta (ID): Universitas Indonesia.
Abreu, Margarida dan Mendes, Victor. (2001). Commercial Bank Interest Margins and Profitability: Evidence for Some EU Countries. Pan-European Conference Jointly Organised by the IEFS-UK & University of Macedonia Economic & Social Sciences. Thessaloniki, Greece, May:17-20.
Ascarya dan Yumanita, Diana. (2005). Bank Syariah: Gambaran Umum, Pusat Pendidikan dan Studi Kebanksentralan (PPSK). Jakarta: Bank Indonesia.
Astiyah, Siti dan Husman, Jardine A. 2006. Fungsi Intermediasi dalam Efisiensi Perbankan di Indonesia: Derivasi Fungsi Profit. Buletin Ekonomi Moneter dan Perbankan (Journal of Monetary Economics and Banking), Maret 2006, 8(4), hal.529-544.
Ataullah A, Cockerill T, Le H. (2004). Financial Liberalization and Bank Efficiency: A Comparative Analysis of India and Pakistan. Applied Economics. 36(17):1915-1924. doi:10.1080/000368404200068638.
Berger, Allen N dan DeYoung, Robert. (1997). Problem Loans and Cost Efficiency in Commercial Banks. Journal of Banking & Finance, 21(6), hal.849-870.
Berger, Allen N dan Humphrey, David B. (1997). Efficiency of Financial Institutions: International Survey and Directions for Future Research. European Journal of Operational Research, 98(2), hal.175-212.
Berger, Allen N dan Mester, Loretta J. (1997). Inside the Black Box: What Explains Differences in the Efficiencies of Financial Institutions?. Journal of Banking & Finance, 21(7), hal.895-947.
Boahene, Samuel Hymore, Dasah, Julius dan Agyei, Samuel Kwaku. (2012). Credit Risk and Profitability of Selected Banks in Ghana. Research Journal of Finance and Accounting, 3(7), hal.6-14.
Bonin, John P, Hasan, Iftekhar dan Wachtel, Paul. (2005). Bank Performance, Efficiency and Ownership in Transition Countries. Journal of Banking & Finance, 29(1), hal.31-53
Claessens, Stijn, Demirgüç-Kunt, Asli dan Huizinga, Harry. (2001). How Does Foreign Entry Affect Domestic Banking Markets?. Journal of Banking & Finance, 25(5), hal.891-911.
Hadad, Muliaman D, Santoso, Wimboh, Ilyas, Dhaniel dan Mardanugraha, Eugenia. (2003). Analisis Efisiensi Industri Perbankan Indonesia: Penggunaan Metode Nonparametrik Data Envelopment Analysis (DEA). Biro Stabilitas Sistem Keuangan Bank Indonesia. Research Paper, (7/5).
Handayani, Puspita Sari. (2005). Analisis Perbandingan Kinerja Bank Nasional, Bank Campuran dan Bank Asing dengan Menggunakan Rasio Keuangan. [Tesis]. Semarang: Program Pasca Sarjana Universitas Diponegoro
Hasibuan, Malayu SP. (1994). Manajemen Sumber Daya Manusia, Dasar dan Kunci Keberhasilan. Cetakan Keenam. Jakarta: CV. Haji Mas Agung.
Kurnia, Akhmad Syakir. (2004). Mengukur Efisiensi Intermediasi Sebelas Bank Terbesar Indonesia dengan Pendekatan Data Envelopment Analysis (DEA). Jurnal Bisnis Strategi, 2004, 13, hal.126-139.
Kwan S. (2002). Bank security prices and market discipline. FRBSF Economic Letter.
Lestari, Etty Puji. (2001). Efisiensi Teknik Perbankan di Indonesia Tahun 1995-1999: Aplikasi Data Enverlopment Analysis. [Tesis]. Universitas Gadjah Mada.
Mansyur, Fakhruddin. (2012). Analisis Perbandingan Efisiensi Bank Umum Syariah dan Bank Umum Konvensional di Indonesia Menggunakan Metode Stochastic Frontier Approach (SFA). UIN Sunan Kalijaga.
Mester, Loretta J. (1997). Measuring Efficiency at US Banks: Accounting for Heterogeneity is Important. European Journal of Operational Research, 98(2), hal.230-242.
Muda, Muhamad, Shaharuddin, Amir dan Embaya, Abdelhakim. (2013). Comparative Analysis of Profitability Determinants of Domestic and Foreign Islamic Banks in Malaysia. International Journal of Economics and Financial Issues, 3(3), hal.559-569.
Naceur, Samy Ben. (2003). The Determinants of the Tunisian Banking Industry Profitability: Panel Evidence. Universite Libre de Tunis Working Papers (ERF Research Fellow).
OJK (Otoritas Jasa Keuangan). (2014). Laporan Profil Industri Perbankan Triwulan II/2014. http://www.ojk.go.id.
Omar, Mohd Azmi, Rahman, Abdul Rahim Abdul, Yusof, Rosylin Mohd, Majid, M Shabri Abd dan Rasid. (2006). MESM. Efficiency of Commercial Banks in Malaysia. Asian Academy of Management Journal of Accounting and Finance, 2(2), hal.19-42.
Ongore, Vincent Okoth dan Kusa, Gemechu Berhanu. (2013). Determinants of Financial Performance of Commercial Banks in Kenya. International Journal of Economics and Financial Issues, 3(1), hal.237-252.
Permatasari, Ika dan Novitasary, Retno, (2014). Pengaruh Implementasi Good Corporate Governance terhadap Permodalan dan Kinerja Perbankan di Indonesia: Manajemen Risiko Sebagai Variabel Intervening. Jurnal Ekonomi Kuantitatif Terapan, 7(1).
Prasnanugraha, Ponttie. (2007). Analisis Pengaruh Rasio-Rasio Keuangan terhadap Kinerja Bank Umum di Indonesia (Studi Empiris Bank-Bank Umum yang Beroperasi di Indonesia). [Skripsi]. Semarang: Universitas Diponegoro.
Roman, Angela dan Şargu, Alina Camelia. (2013). Analysing the Financial Soundness of the Commercial Banks in Romania: an Approach Based on the Camels Framework. Procedia Economics and Finance, 6, hal.703-712.
Rusydiana, Aam S dan Devi, Abrista. (2013). Challenges in Developing Baitul Maal wat Tamwiil (BMT) in Indonesia using Analytic Network Process (ANP).
Sarjana I. (2014). Pengaturan batas waktu pendaftaran jaminan fidusia pada undang-undang nomor 42 tahun 1999. Jurnal Magister Hukum Udayana, 5(1).
Siamat, Dahlan. (2005). Manajemen Lembaga Keuangan: Kebijakan Moneter & Perbankan- 5/E.
Sok-Gee, Chan. (2011). Technical Efficiency of Commercial Banks in China: Decomposition into Pure Technical and Scale Efficiency. International Journal of China Studies, 2(1), hal.27.
Stanton, AWB, Badger, C dan Sitzia, J. (2000). Non-invasive Assessment of the Lymphedematous Limb. Lymphology, 33(3), hal.122-135.
Subandi dan Ghozali, Imam. (2013). Determinan Efisiensi dan Dampaknya Terhadap Kinerja Profitabilitas Industri Perbankan di Indonesia. Jurnal Keuangan dan Perbankan, 17(1), hal.123-135.
Supriyono, Edy. (2007). Penggunaan Pendekatan Service Gap untuk Pengukuran Pandangan Manajemen Berkenaan dengan Efektifitas Sistem Informasi Akuntansi Bank, pada Bank Pemerintah di Jawa Tengah. Diponegoro University.
Suyono, Agus. (2005). Analisis Rasio-Rasio Bank yang Berpengaruh terhadap Return on Asset (ROA). [Tesis]. Semarang: Universitas Diponegoro.
Tang, Helena, Zoli, Edda dan Klytchnikova, Irina. (2000). Banking Crises in Transition Economies: Fiscal Costs and Related Issues. World Bank Policy Research Working Paper, (2484).
Warganegara, Akmal Rangga Putra. (2011). Determinan Net Interest Margin Industri Perbankan Indonesia. [Tesis]. Jakarta (ID): Universitas Indonesia.
Published
2015-12-02
How to Cite
Widiarti, A., Siregar, H., & Andati, T. (2015). THE DETERMINANTS OF BANK’S EFFICIENCY IN INDONESIA. Buletin Ekonomi Moneter Dan Perbankan, 18(2), 129-156. https://doi.org/10.21098/bemp.v18i2.520
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Buletin Ekonomi Moneter dan Perbankan / Bulletin of Monetary Economics and Banking is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
