This research purpose to analyze production efficiency of Islamic banking
industry in Indonesia, especially Sharia Commercial bank (BUS) and Sharia
Business Unit. Efficiency is a parameter for measuring banking performance.
There are 9 Islamic banks which used as samples of this research and divided into
two groups of banks, 3 BUS and 6 UUS.
This Research use Stochastic Frontier Analysis (SFA) methods to measure
the efficiency of Indonesian banking in BUS and UUS. The result of SFA that
appear in the form of a score between 0-1, closer to 1 it means a bank more
efficient. Variables were chosen based on the intermediation analysis. Input
variables in this research are total deposits, operational expenses, and other
operational expenses, and the output variable is total financing as the main
product of Islamic banking. In order To know the difference of efficiency level of
each bank, we used independent sample t- test.
The analysis using SFA showing that during 2005-2009 the efficiency of
BUS and UUS always increase with the average efficiency 0.976207 for BUS and
0.969280 for UUS. This is showing that BUS in Indonesia better than UUS in
efficiency with the BUS efficiency more optimum in total financing during 2005-
2009. The average of BUS efficiency and UUS position in 0,9 of efficiency range
level show that BUS and UUS in Indonesia has reach the efficiency level even not
until the full of efficiency or 1. Based on the panel to know the impact of input
variables to output variable found that total deposits and operational expenses
has positif and significant impact to total financing, while other operational
expenses has positif impact but not significant to total financing. Finding of
independent sample t-test analysis showing that there is no difference in efficiency
level between BUS and UUS