ASEAN Banking Efficiency Review Facing Financial Services Liberalization: The Indonesian Perspective

Abstract

One of the challenges facing banks in the ASEAN region is the plan to establish the ASEAN Banking Integration Framework (ABIF). The main objective of ABIF is to prepare market access and operational flexibility in ASEAN countries to create Qualified ASEAN Banks (QAB), ie ASEAN banks that meet certain requirements agreed by ASEAN. This paper analyzes the level of bank efficiency in ASEAN member countries, taking samples of banks in Indonesia, Malaysia, Singapore, Thailand, Philippines, and Vietnam, using Data Envelopment Analysis (DEA) method, analysis of financial ratios and comparison of research results with different approaches. The results of the analysis show that although the approach of financial ratios and DEA of Indonesian banks appear efficient, but when analyzed from NIM, the Indonesian banking system is inefficient.