Managing Bank Performance under COVID-19: A Novel Inverse DEA Efficiency Approach

Sabri Boubaker, T.D.Q. Le and Thanh Ngo

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Abstract: The evolution of the COVID-19 pandemic is highly unpredictable; however, its impacts are limited to neither a single sector nor a single country. This study evaluates the performance and efficiency of 49 Islamic banks across 10 countries during 2019\textendash2020 to assess how those banks can preserve their performance and remain resilient in the aftermath of the COVID-19 pandemic. Using the conventional inverse data envelopment analysis (InvDEA) approach, we show that because of reductions in their outputs, 31 out of the 49 banks studied would need to reduce their inputs so that their efficiency can remain unchanged. However, we show that only 10 banks need to make such adjustments to maintain their efficiency levels using our proposed InvDEA efficiency model. The adjustment for those 10 banks would help in reducing more inputs, suggesting more cost savings, and improving the overall efficiency of the examined banks, compared with the other 31 banks. \textcopyright 2022 The Authors. International Transactions in Operational Research published by John Wiley & Sons Ltd on behalf of International Federation of Operational Research Societies.

Keywords: % reductions; Analysis approach; Bank performance; Cost saving; COVID-19; Data envelopment analysis; efficiency; Efficiency; Efficiency levels; Efficiency models; inverse DEA; Inverse DEA; Islamic bank; Islamic banks; panel data; Panel data (search for similar items in EconPapers)
Date: 2023
Note: View the original document on HAL open archive server: https://normandie-univ.hal.science/hal-04435441v1
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Citations: View citations in EconPapers (4)

Published in International Transactions in Operational Research, 2023, 30 (5), pp.2436-2452. ⟨10.1111/itor.13132⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-04435441

DOI: 10.1111/itor.13132

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