Efficiency in the Eye of the Storm: A Comparative Analysis of Conventional and Islamic Banks in Pakistan During the Covid-19 Pandemic using Data Envelopment Analysis (DEA)
Keywords:Financial Efficiency, Data Enveloping Analysis, Risk Assessment and Indicators, Islamic Banks, Conventional Banks
This study explores the financial efficiency of conventional and Islamic banks in Pakistan during the COVID-19 pandemic, using enveloping data analysis (DEA) to measure their technical efficiency. The study found that overall, conventional banks had higher technical efficiency than Islamic banks in both 2020 and 2021, except for one Islamic bank. However, the authors acknowledge that comparing the technical efficiency of Islamic and conventional banks can be challenging due to their differing business models. Additionally, the study found that Islamic banks generally outperformed conventional banks regarding asset quality and profitability during the pandemic, while conventional banks performed better in terms of technical efficiency. This research provides insights into the comparative performance of conventional and Islamic banks during a period of economic turbulence, which is of relevance Cleaner Production. As environmental and social sustainability are of increasing importance in the finance sector, the findings of this study can help identify potential opportunities for Islamic and conventional banks to enhance their sustainability practices and contribute to a cleaner production.
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