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

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 2019-2020 to assess how those banks can preserve their performance and remain resilient in the aftermath of the COVID-19 pandemic. 

This study adopts the conventional inverse data envelopment analysis (InvDEA) approach to evaluate the performance and efficiency of 49 Islamic banks across 10 countries during 2019–2020 under COVID-19. It is shown 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, 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.

Originated from

Boubaker, S., Le, T. D. Q., & Ngo, T. (2022). Managing Bank Performance under COVID-19: A Novel Inverse DEA Efficiency Approach. International Transactions in Operational Research, 30, 2436-2452. 

https://doi.org/10.1111/itor.13132

AUTHOR FROM VNU UNIVERSITY OF ECONOMICS AND BUSINESS

Assoc. Prof. Ngo Dang Thanh is a lecturer at the Faculty of Political Economy, VNU University of Economics and Business. His main research and teaching directions include analysis of technical productivity and efficiency, data envelopment method, stochastic production method, finance - banking.