THE EFFICIENCY OF COMMERCIAL BANKS IN INDONESIA (CASE STUDY 19 COMMERCIAL BANKS IN INDONESIA PERIOD 2008-2017)

• Main Author: Miftahus Shubhi (19015146), Muhammad
• Format: Final Project
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/29288
• Institution: Institut Teknologi Bandung

The efficiency of the banking system is one of the most important issues in the financial market because the efficiency of banks can affect the stability of the banking industry and the effectiveness of the whole monetary system. A good banking condition that health and efficient is an absolute requirement for the bank to perform their function as intermediation well. With a healthy and efficient banking, our national economy will be able to grow well. If the intermediation function is not running optimally and efficiently, it will affect the occurrence of inefficient credit allocations. Banking industry can implement its business strategy in the future by knowing the position of efficiency score. The biggest capitalization bank compared to the rest of bank in Indonesia called by Commercial Bank based on Business Activities (BUKU) 3 and Commercial Bank based on Business Activities (BUKU) 4 and these bank are represent all the bank operating in Indonesia. The most majority from the capitalization bank in indoensia are commercial bank. <br /> <br /> this research is to analyze the technical eficiency of the commercial banks in Indonesia from 2008 until 2017. This research used 19 commercial banks that listed on BUKU 3 and BUKU 4 in Indonesia by using non-parametric Data Envelopment Analysis (DEA). DEA was calculated using intermediation approach, output oriented, and using Variable return to scale (VRS). This research using total deposits, fixed asset, and price of labor as the input and using total loan and income as the output. The result of this research shows that only BRI, MANDIRI, MIZUHO and SUMITOMO MITSUI that could reached 100% from 2008 to 2017. <br /> <br /> The result of this research might be helpful for the management, to use the bank that already efficienct as the benchmark in using input variables for produce the optimal output, for the government, in this case Bank Indonesia, information on the level bank efficiency can be taken into consideration in determine the direction of policies and regulations related banking in Indonesia for the future the banking industry can run its operations more efficiently and for society and investors, the efficiency level can be used as a guide in making an investment decision right toward the bank operating based on the efficiency level, thus minimizing errors in choosing the bank as a place invest and deposit funds.