The Efficiency of Islamic Banking in the Balkans: The Case of BBI Bank in Bosnia and Herzegovina

Katerina Fotova Čiković ()
Additional contact information
Katerina Fotova Čiković: University North

A chapter in Economic Recovery, Consolidation, and Sustainable Growth, 2023, pp 351-366 from Springer

Abstract: Abstract The main purpose of this paper is to evaluate the relative efficiency of Islamic banking in the Balkans, i.e. in the only bank applying Islamic banking principles (the BBI Bank in Bosnia and Herzegovina) and to compare it to the relative efficiency of conventional Bosnian banks. The output-oriented data envelopment analysis (DEA hereafter) BCC methodology with two inputs (interest and non-interest expenses,) and two outputs (interest and non-interest revenues) has been applied, in the period from 2016 to 2021. Finally, the impact of the COVID-19 pandemic on both Islamic and conventional banks is discussed and managerial implications are drawn. The findings reveal that the group of large banks are most efficient in the B&H banking sector, whereas the small-sized banks are least efficient. Islamic banking noted lower efficiency than conventional banking in the B&H. This is in line with the previous studies. The scientific contribution of this article mirrors its great significance for both academic members, banking management and regulatory bodies, as well as the interested public. To the best of the author’s knowledge, this is the first empirical study that includes a glimpse of the efficiency and performance of the only Islamic bank operating in the Western Balkan as well as the first empirical study that provides a comparison between the efficiencies of Islamic and conventional banks in the period of the COVID-19 pandemic in B&H.

Keywords: Islamic banking; Relative efficiency; Data envelopment analysis; DEA; Bosnia and Herzegovina (search for similar items in EconPapers)
Date: 2023
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:prbchp:978-3-031-42511-0_22

Ordering information: This item can be ordered from
http://www.springer.com/9783031425110

DOI: 10.1007/978-3-031-42511-0_22

Access Statistics for this chapter

More chapters in Springer Proceedings in Business and Economics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().