Malaysian full-fledge Islamic banks performance: a comparative analysis using data envelopment analysis (DEA)

This project aims to evaluate the operational efficiency of Malaysian full-fledged Islamic banks over a six-year period from 2018 to 2023, with special attention to performance before, during, and after the COVID-19 pandemic. The study focuses on four full-fledged Islamic banks which are Bank Islam Malaysia Berhad, Bank Muamalat Malaysia Berhad, Bank Rakyat, and MBSB Bank Berhad, assessing their ability to utilize resources efficiently. It addresses the issue of banking performance fluctuations during economic disruptions like the COVID-19 crisis. The methodology includes Data Envelopment Analysis (DEA), specifically the CCR model, to measure technical efficiency. Data was collected from the banks’ annual reports from 2018 to 2023 and analyzed using DEA Solver Learning software, version 8.0. Findings reveal that Bank Islam Malaysia Berhad and MBSB Bank Berhad consistently maintained full efficiency throughout the six years, demonstrating strong operational stability despite pandemic-related challenges. This project shows that Malaysian Islamic banks generally remained competitive and resilient, offering insights into the stability of Islamic banking. It also provides guidance for policymakers and bank management. The project successfully evaluated and ranked the efficiency of four major Islamic banks in Malaysia, laying a foundation for future research and improvement in Islamic banking operations, especially in response to global economic uncertainties.