Banks Efficiency Analyses in Dual Banking System

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Muhammad Iqbal
Robert M. Kunst


The share of Islamic banks is growing in the banking sector steadily. An increasing number of conventional banks are introducing Islamic banking services. We estimate the efficiencies of banks by applying Data Envelopment Analysis (DEA) and for bias correction, we apply the double bootstrap method. In the second stage, determinants of efficiency are analyzed. Annual data from the reports of the banks is employed for the analysis Conventional banks providing Islamic banking services are found to be performing better in terms of technical efficiency than pure Islamic and pure conventional banks. In the financial crisis period, there is no evidence of a difference in the performance of banks across all groups.

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