Global Islamic banking efficiency: The impact of profitability, liquidity, solvency, and technology

Alif Ahmad Sulthoni Putra Rofiqi, Alif Ahmad Sulthoni Putra Rofiqi and Guntur Kusuma Wardana, Guntur Kusuma Wardana ORCID: https://orcid.org/0000-0001-7901-1228 (2026) Global Islamic banking efficiency: The impact of profitability, liquidity, solvency, and technology. Dalwa Islamic Economic Studies:Jurnal Ekonomi Syariah, 5 (1). pp. 56-66. ISSN 2829-2650

Preview

Text 27904.pdf Download (363kB) | Preview

Abstract

This study aims to analyze the influence of profitability, liquidity, solvency, and technology on the efficiency of Islamic banks worldwide. This research is motivated by the importance of operational efficiency in enhancing the performance and competitiveness of Islamic banking amid global economic dynamics and the rapid development of digital technology. The variables used include profitability proxied by Return on Assets (ROA), liquidity by Financing to Deposit Ratio (FDR), solvency by Capital Adequacy Ratio (CAR), and technology (measured via IT cost proxy) as a supporting factor for bank operational efficiency. This study employs a quantitative approach using the Two-Stage Data Envelopment Analysis (DEA) method, with the first stage measuring the efficiency levels of Islamic banks and the second stage applying Tobit regression to analyze the influence of independent variables on efficiency. The data used are secondary data from global Islamic banks registered with the Islamic Financial Services Board (IFSB) for the period 2019–2024. The results indicate that profitability has a significant positive influence and liquidity has a significant negative influence, while solvency and technology show no significant influence on the efficiency of Islamic banks, thus requiring sound financial management and optimal utilization of technology to improve the performance and competitiveness of Islamic banking globally.

Item Type:	Journal Article
Keywords:	Efficiency, Profitability, Liquidity, Solvency, Technology
Subjects:	15 COMMERCE, MANAGEMENT, TOURISM AND SERVICES > 1502 Banking, Finance and Investment
Divisions:	Faculty of Economics > Department of Islamic Banking
Depositing User:	Guntur Kusuma Wardana
Date Deposited:	10 Jul 2026 15:46

Downloads

Origin of downloads

Actions (login required)

View Item