Regional Banking Efficiency in Indonesia

Chitra Laksmi Rithmaya, - Anggraeni


The development of banking industry in Indonesia could bring impact on the economic growth, especially in the face of the financial crisis. This study aims to examine scientifically the efficiency score of regional development banks. Furthermore, it also aims to understand further what factors influence the efficiency performance of regional development banks in Indonesia using the SFA (Stochastic Frontier Analysis) approach. The data used is from 25 Regional Development Banks (BPD) in Indonesia with the financial reporting period of 2011 to 2017. The results obtained are the level of efficiency of BPD in Indonesia does not reach 100%. The highest level of efficiency was at 97.80% in 2016. Then, the variable that affects bank efficiency is liquidity as measured by LDR, and credit risk as measured by NPL. Meanwhile, the variables of bank capital and profitability as well as the size of the bank and board of commissioners do not affect the efficiency of banks, especially Regional Development Banks in Indonesia in the period of 2011-2017.


Bank Efficiency, LDR, NPL, Stockhastic Frontier Analysis.

Full Text:



Abata, M. A. (2014). Asset Quality and Bank Performance : A Study of Commercial Banks in Nigeria. Research Journal of Finance and Accounting, 5(18).

Anam, A. K. (2013). Risiko Likuiditas Dan Dampaknya Terhadap Kinerja Perbankan Di Indonesia. Jurnal Dinamika Ekonomi Dan Bisnis.

Andrayani, E. A. (2018). Pengaruh Kecukupan Modal, Risiko Kredit, Efisiensi Operasional, dan Likuiditas Terhadap Profitabilitas Perusahaan Perbankan Di Indonesia. Jurnal Manajemen Bisnis Indonesia.

Anggraeni. (2016). The determinant of Indonesia’s islamic rural banking risk taking. International Business Management, 10(13), 2541 – 2546.

Anggraeni, A., Mongid, A., & Suhartono. (2020). Prediction models for bank failure: ASEAN countries. Jurnal Ekonomi Malaysia.

Berger, A. N., & Mester, L. J. (1997). Inside the black box: What explains differences in the efficiencies of financial institutions? Journal of Banking and Finance.

Chaidir, L. (2015). Pengaruh Kondisi Permodalan, Efisiensi Operasional, Likuiditas, Resiko Kredit Dan Resiko Pasar Terhadap Tingkat Profitabilitas Bank (Studi Kasus Sepuluh Bank Dengan Aset Tertinggi di Indonesia Periode 2009-2014). Universitas Brawijaya.

Cooper, M. J., Jackson, W. E., & Patterson, G. A. (2003). Evidence of predictability in the cross-section of bank stock returns. Journal of Banking and Finance.

Hadad, M. D., Hall, M. J. B., Kenjegalieva, K. A., Santoso, W., & Simper, R. (2011). Banking efficiency and stock market performance:an analysis of listed Indonesian banks. Review of Quantitative Finance and Accounting.

Mahmud, K., Mallik, A., Imtiaz, F., & Tabassum, N. (2016). The Bank-Specific Factors Affecting the Profitability of Commercial Banks in Bangladesh: A Panel Data Analysis. International Journal of Managerial Studies and Research, 4(7), 67–74.

Mongid, A., & Muazaroh, M. (2017). The efficiency and inefficiency of the banking sectors: Evidence from selected ASEAN banking. Jurnal Ekonomi Malaysia.

Novius, A., Syafe’i, J., & Yetti, F. D. (2016). Pengaruh Analisis Data Envelopment Analysis (DEA), Stochastic Frontier Analysis (SFA), Distribution Free Approach (DFA), Derivasi Fungsi Profit dan BOPO Terhadap Perbandingan Efisiensi Kinerja Perbankan Syariah di Indonesia. Fokus Ekonomi : Jurnal Ilmiah Ekonomi, 11(1), 113–136.

Ongore, V. O., & Kusa, G. B. (2013). Determinants of financial performance of commercial banks in Kenya. International Journal of Economics and Financial Issues.

Sukandar, P. P. (2014). Pengaruh Ukuran Dewan Direksi dan Dewan Komisaris Serta Ukuran Perusahaan Terhadap Kinerja Keuangan Perusahaan. Diponegoro Journal Of Accounting.

Sutanto, H. A. (2015). Analisis Efisiensi Teknis Bank Pembangun. Jejak, 8(1), 23–35.


Copyright (c) 2021 Media Trend

Creative Commons License

Mediatrend © 2015 - Journal of Economic & Development Studies | Development Economics Program - Faculty of Economics and Bussiness, Trunojoyo University