Malaysian Management Review
EFFICIENCY OF THE LOCAL COMMERCIAL BANKS IN MALAYSIA
VIKY NOVRIZA PRIMA PUTRA and SHAHARIR BIN MOHAMAD ZAIN - Pusat Pengajian Sains Matematik, Universiti Kebangsaan Malaysia
INTRODUCTION
Many studies on bank efficiencies have been made overseas at
least since 1990, but so far only one article, "The Banker"
(1998) has been found to refer to bank efficiency in Malaysia.
Even then, the model used for measuring the efficiency is too
simple. Thus there is a need to study the efficiencies of
Malaysian banks based on a more rigorous and realistic model.
There are two approaches in investigating bank efficiency,
namely the intermediation and the production approaches. In the
intermediation approach, a bank is regarded as an intermediator
for services, whereas in the production approach, a bank is
assumed to be a producer of financial services (saving and
loan). These two approaches are described in Aly et al. (1990)
who investigated the efficiency of banks in the USA using the
intermediation approach. They used a general efficiency model
(for any organization) proposed by Färe et al. (1985) which
exploits the deterministic linear programming model. Aly et al.
(1990) regard the inputs of a bank as workers, capital, and the
fund accumulated for loans, interest expenses, and production
expenses; whereas various loans (housing, industrial and trade,
clients loan, and other loans), and saving demand are regarded
as bank outputs. They found that the "overall efficiency" of the
American commercial banks was at a medium level (about 65%), but
their "scale efficiency" was at the higher level which means
that the American banks before 1990 were not operating on the
constant scale of return but on a diminishing scale of return.
Chen and Yeh (1998) measured the efficiency of the operation in
the commercial banks in Taiwan. They modified the Aly et al.
(1990) bank's inputs to further include the number of branches,
operating expenses, total savings, and interest expenses;
whereas the outputs were also modified to refer to the total
loan, investment, interest income, and non-interest income. They
found that the Taiwan banks were highly efficient. Jemric and
Vujcic (2002) analysed the efficiency of banks in Crotia in
1995, 1999 and 2000 with the same Aly et al. (1990) input-output
model and they found that the efficiency of the banks in 1995
was low (only 45%) but increased to more than 70 percent in 1999
and 2000 with a slight decrease in 2000. Casu and Girardone
(2002) investigated the same model of efficiency for banks in
Italy. They found that the Italian banks were efficient (83-90%
efficiencies).
Other studies on bank efficiencies are based on the production
approach. In this respect, "The Banker" (1998) examines 1000
banks in 40 countries throughout the world, including the Middle
East (Bahrain, Iran, Kuwait, and United Arab Emirates), Asia
(China, Hong Kong, Japan, Malaysia, Philippine and Singapore),
Holland and Mexico. "The Banker" used the simplest measure of
efficiency, namely the ratio between income and expenses of a
bank, and found that, for example, the banks in Hong Kong were
operating at the lowest efficiency level (only about 35%), the
banks in Indonesia were only about 55 percent efficiency, those
in Malaysia were about 45 percent efficiency, in Great Britain
and USA were about 57 percent and 61 percent efficiency,
respectively, whereas those in Iran and Mexico were highly
efficient (about 90% and 83%, respectively).
Weber and Devaney (1999) also measured the efficiency of
commercial banks in the USA in 1990 and 1993 based on the
production approach, where equity was the input and the total
assets were the output in their linear programming model. They
argued that there are three sources of inefficiency in
commercial banks, namely, the capital based on risk, the use of
their buildings, and the nature of scale of operation. However,
they found that the loss due to the risk on the capital gives
only about three percent of the total bank assets, and hence
proposed that the bank management should be concentrating more
on the increase of the financial performance of the building
used and on the effort of operating at a constant scale of
return. Wheelock and Wilson (1995) discussed how far the study
of bank efficiency has attracted the bankers and also put
forward two necessary and important reasons for knowing bank
efficiencies. Firstly, they argued that efficiency indicates the
success or otherwise of a bank. Secondly, a relevant measure of
efficiency reflects a potential impact of government policies.
They also found that the bank efficiency according to the
intermediation approach is higher than the corresponding
efficiencies based on production approach; while an efficiency
known as the allocation efficiency is on average the same for
both approaches, and an inefficient bank normally operates on a
non-constant scale of return.
In this article, we apply the efficiencies concepts developed by
Farrell in 1958 as described and clarified by Färe et al. (1985)
to all commercial banks in Malaysia from the production point of
view. Our study is also geared towards comparing our findings
with those overseas mentioned above, especially with those found
by "The Banker" (1998).
MODELLING
There are many concepts of efficiency based on the ratio of
theoretical best inputs and the actual inputs under certain
conditions, and three of them have already been mentioned above,
namely, overall efficiency, scale efficiency and allocation
efficiency. Other well-known types of efficiencies are technical
efficiency and pure technical efficiency. According to Fare et
al (1985), these efficiencies were first proposed by Farrell in
1958 as they tried to clarify and improve the concepts
significantly. The overall, technical and the allocations
efficiencies are for a company which operates at a constant
scale of return, whereas the other two efficiencies are devised
for a non-constant scale of return.
As mentioned, the overall efficiency refers to the level of
usage of inputs for producing outputs at a level of constant
scale of return. Therefore, this efficiency refers to the
theoretical least expenses of inputs in order to produce a level
of outputs compared to the actual expenses of the company and
all other similar companies which produce the same output using
the same type of inputs and operate at a constant scale of
return. Thus in this efficiency model, the objective of each
member of company group is to find the least theoretical
expenses of the individual company which operates at a constant
scale of return, subject to a constraint as follows:
Minimize HiiXii (1)
subject to
Uik ZrUrk ,
k = 1, 2, ...,u (total types of outputs) (2a)
Xii > ZrNrk ,
i = 1, 2, ..., n (total types of inputs) (2b) Zr > 0, r = 1, 2,
..., s
(total number of companies) (2c)
Hii = the price of the j-th type of input at the i-th company
(data). Xii = the amount of the j-th type of input at the i-th
company (variables). Uik = the actual amount of the k-th type
of output at the i-th company (data). Nii = the actual amount
of the j-th type of input at the i-th company (data). Zi = the
weight of the i-th company (variables).
The overall efficiency of the i-th company is defined as HiiXii
(minimum) wi = ---------------- (3) HiiXii (actual)
This is the first Farrell efficiency which is reviewed by Fare
et al. (1985) but a new rationale of the validity and the
plausibility of this model is discussed recently in Viky (2003).
Another measure of efficiency of a company which operates on a
constant scale of return is known as the technical efficiency
which refers to the theoretical expenses at the isoquant
compared to the corresponding expenses at the non-isoquant
(which is assumed to be the present or the actual expenses). Let
us assume that the amount of inputs presently used by the j-th
company are (X1j ,...., Xtj) and the amount of new inputs
required for the same company operating at the isoquant are ?j ?
(X1j , ... Xtj), where the tau is the factor of reducing the
inputs to the isoquant. Thus the total cost of the inputs used
presently by the j-th company is HijXij but at the isoquant is
??j HijXij. The new efficiency for the j-th company can now be
defined as the ratio between the later expenses and the former
expenses, i.e. the tau can be interpreted as ?i * = mini
{technological factor for the i-th company}
Thus in general, the technical efficiency ?i for the i-th
company can be obtained by solving the following linear
programming problem: Minimize ?i (4) subject to Uik ZrUrk ,
k = 1, 2, ...,u (total types of outputs) (5a)
?iNij ? ZrNrk ,
j = 1, 2, ..., n (total types of inputs) (5b) Zr ? 0, r = 1, 2,
..., s
(total number of companies) (5c)
Once again, a new rationale for this model can be found in Vicky
(2003).
Another concept of efficiency is known as the allocation
efficiency obtained from the two efficiencies above. The
technical efficiency is always less than the overall efficiency
since the former refers to the performance at an isoquant and
the later is not. If a company were able to operate efficiently
with respect to its technical efficiency, then the company could
save its input and hence the overall efficiency could be
increased. The amount of the input saved is naturally suitable
to be named as the allocation efficiency, (, which is a
comparison between the two efficiencies, the ratio between the
overall efficiency and the technical efficiency: ?i ?i = --- (6)
?i In order to differentiate between efficiency at a constant
scale of return and efficiency at a non-constant scale of
return, Farrell introduced another measure of efficiency,
namely, the pure technical efficiency, ?, specifically for a
company which operates at a non-constant scale of return. As
emphasized by Färe et al. (1985: 45) and further rationalized by
Viky (2003), the pure technical efficiency ? is the solution of
the same problem as the technical efficiency except that the
constraint on the weight Z components is strictly equal to 1,
i.e.
Minimize ?i (7) subject to
Uik ZrUrk ,
k = 1, 2, ...,u (total types of outputs) (8a) s = total number
of companies
?iNij ? ZrNrk ,
j = 1, 2, ..., n (total types of inputs) (8b)
Zr = 1 (8c) Zr ? 0 (8d)
The pure technical efficiency measures the percentage amount of
the current input for which the company needs to use in order to
operate at a non-constant scale of return and also at an
isoquant.
Normally, an efficient firm necessarily operates at a constant
scale of return; whereas a firm which is at a non-constant scale
of return is clearly at a diminishing scale of return and hence
normally inefficient. Therefore Farrel introduced another
efficiency known as the scale efficiency, ?, for the purpose of
observing the scale of return. The higher this efficiency is the
clearer that the company concerned is at a diminishing scale of
return. Färe et al. (1985: 45) state that for this purpose, one
must assume that the total weight Z components must not exceed 1
and hence the problem is to investigate the following problem:
Minimize ?i (9) subject to
Uik ZrUrk , (10a)
?iNij ? ZrNrk , (10b)
Zr 1 (10c) Zr ? 0 (10d)
IMPLEMENTATION OF THE MODEL ON THE LOCAL COMMERCIAL BANKS IN
MALAYSIA
According to Persatuan Bank-Bank Malaysia (2002), there are 24
banks in Malaysia and 11 of them are local banks (i.e., the
majority of their capitals owned by local companies). Our study
is based on secondary data obtained from companies' financial
reports 2001, which were obtained from Perpustakaan Bank Negara
Malaysia, Bursa Saham Kuala Lumpur, Permodalan Nasional Berhad,
and relevant webs.
Following Aly et al. (1990), it is assumed that the inputs of
any bank are workers, capital, and fund available for loans; and
following the production approach of a banking system as it was
done by "The Banker" (1998) and prescribed by Vancil (1970), it
is assumed that only the profit is the output. Thus, the
variables and parameters in accordance with the general theory
outlined in the previous section are as follows:
Xi1 = the total workers at the i-th bank, i = 1, 2,..., s = 11.
Xi2 = the book value of the fixed assets at the i-th bank (The
balance from the expenses of the assets minus the accumulated
decrement of the fixed assets). Xi3 = fund accumulated at the
i-th bank (from the liability on the financial balance ) Xi4 =
loan given to individuals and industries by the i-th bank. Zi =
weight at the i-th bank. Hi1 = the average price or wage of a
worker at the i-th bank . Hi2 = the expenses of the RM1 fixed
asset at the i-th bank (the cost of the fixed assets divided by
the book value). Hi3 = the expenses of the RM1 accumulated
fund at the i-th bank (the cost of the accumulated fund divided
by the accumulated fund obtained from the liability on the
financial balance). Hi4 = the actual price or expenses of RM1
risk of loan given to the i-th bank. Ui1 = Ui = the actual
profit before taxes and zakat at the i-th bank. Ni1 = the
actual total workers at the i-th bank. Ni2 = the actual amount
of the book value of the fixed assets at the i-th bank. Ni3 =
the actual accumulated fund at the i-th bank. Ni4 = the actual
loan given to individuals and industries by the i-th bank.
The relevant data are in Appendix 1 and Appendix 2.
Using the above-mentioned data, every type of Farrell
efficiencies (overall, technical, allocation, pure technical and
scale efficiencies) briefly described theoretically in the
previous section can now be calculated. The overall efficiency ?
is given by (3) after solving (1)-(2a,b,c) where s=11, n=4 and
u=1; the technical efficiency ? is obtained from the solution of
the problem (4)-(5a,b,c); the allocation efficiency ? is given
by (6); the pure technical efficiency, ?, is obtained by solving
the problem (7)- (8a,b,c,d); and, the scale efficiency, ?, is
obtained by solving the problem (9)-(10a,b,c,d). Computations
were made using Lindo version 6.00, issued by LINDO, Inc. The
results for the theoretical best inputs are shown in Table 1,
whereas various efficiencies are in Table 2.
It is found that the average overall efficiency of the local
commercial banks in Malaysia for 2001 was about 36 percent only
(i.e. inefficient, and this excludes the performance of Affin
Bank whose overall efficiency is zero!), and this is lower than
the rough estimation of the efficiency of Malaysian banks
(presumably including non-commercial and non-local banks)
obtained by "The Banker" (1998) which was about 47 percent. This
shows that Malaysian local commercial banks in 2001 were not
efficient at all in gaining profits from various activities of
the banks. In other words, the banks could certainly gain much
more profit from the same level of activities or inputs. Hong
Leong Bank was the only fully efficient local commercial bank in
2001, which means that the bank could not possibly gain more
profit out of her present (2001) level of activities. The most
inefficient local commercial bank were Affin Bank (in fact, not
efficient at all) and Bumiputra-Commerce Bank Berhad. Table 3
shows the differences between the theoretical best inputs and
the actual inputs. Table 4 shows the overall actual expenses of
the inputs and the minimum overall expenses of the same inputs.
The average overall efficiency of our local commercial banks is
low (only 36.0% ± 77.5% without considering the worst bank,
Affin Bank) where ± s percent represents the standard deviation
s percent (Table 2). This shows that our local commercial banks
in 2001 were not only inefficient but also have very high
variability in performances (in fact, there were one 100%, two
below 10%). In 2001, Affin Bank made a loss of over RM747
million, while all of its expenses exceeded RM2 billion. No
wonder this mathematical model shows her zero overall efficiency
?. Bumiputra-Commerce Bank Bhd had an overall efficiency ? only
slightly better than Affin Bank, i.e about 6 percent. This bank
should have been operating at RM281 million only but her actual
operating cost was RM4.5 billion! Details of unnecessary high
expenses on every input of the bank are shown in Table 3,
including having nearly seven thousand extra workers (Table 1).
Overall, Hong Leong Bank was the best local commercial bank in
Malaysia in 2001 having been able to make use of all of her
inputs in a most profitable way as reflected in her 100 percent
overall efficiency (Table 2). The bank also shows her full
efficiency with respect to the ability to operate on an isoquant
defined by all local commercial banks in Malaysia as reflected
on her 100 percent technical efficiency. This later performance
of Hong Leong Bank was only shared by the Arab-Malaysian Bank.
Even though Maybank was not efficient with respect to overall
and technical performances, the bank was fully efficient with
respect to pure technical and scale performances, which show
that the bank was (in 2001) operating fully efficiently on an
isoquant of non-constant scale of return and also fully
efficient on a constant scale of return. These later facts also
hold for Hong Leong Bank and Arab-Malaysian Bank. It is also
interesting to note that the scale efficiency of each of the
Malaysian local commercial banks was the same as her
corresponding technical efficiency. The average technical
efficiency of the Malaysian local commercial banks was also low
(47.6% ± 29.5%) which turns out, interestingly, to be the same
as the scale efficiency. This shows that the Malaysian local
commercial banks were about half way away from an isoquant and
also at a somewhat high rate of diminishing scale of return
(about 48%). For example, the technical and the scale
efficiencies of the Alliance Bank were about 46 percent, which
means that at a constant scale of return, the bank needed to
reduce 54 percent of her current expenses in order to put the
bank on an isoquant (a level of production similar to other
organizations), which in turn means that the bank needed a total
of RM489 million expenses (about 46 percent of the actual
expenses) in order to operate at the isoquant. At the same time,
the bank was at the rate of 46 percent diminishing scale of
return. The value of the technical and scale efficiencies of
other banks (Table 2) can be used to interpret their respective
situation in a similar way.
The average pure technical efficiency ? for the Malaysian local
commercial banks was quite high (83.3% ± 20.85%). (Excluding
Affin Bank which was not the lowest). Since this was higher than
the technical efficiency ? (Table 1), this means that in 2001 it
would have been better if the Malaysian local commercial banks
had not increased their inputs in order to improve their
performance. For example, the pure technical efficiency ? for
Affin Bank was about 77 percent, which means that the bank was
better off not to increase any of her input; after all, her
current performance was at its worst. Since almost every local
commercial bank in Malaysia in 2001 was at a high value of pure
technical efficiency level, then almost all of the banks were at
the reducing scale of return, which means that they would be
much better off if they did not increase any of their inputs.
For those banks whose technical efficiency ? and pure technical
efficiency ? are 100 percent, the banks were at the constant
scale of return. Therefore, technically the banks were fully
efficient at the constant scale of return and at the
non-constant scale of return the banks were inefficient. For
example, BCB had her technical efficiency ? of 9 percent and her
pure technical efficiency ? of 100 percent and this means that
despite BCB was very far away from an isoquant of all commercial
banks in Malaysia, the bank would have been also certainly much
better off not to increase any of her inputs in order not to
suffer 100 percent loss out of that "new capital".
The average scale efficiency of the Malaysian local commercial
banks in 2001 was 47.6%±29.5%, which was slightly above average.
This supports the contention that the Malaysian banks were able
to gain about half of the amount of the increment in inputs as
profits, so that it would be better not to increase any of the
bank's inputs mentioned in this model in the section above but
rather concentrating more on improving the bank with the present
inputs. For example, the scale efficiency for Affin Bank was
zero as expected, after the bank had undergone a huge loss,
which means the bank would not make any change whatsoever if the
bank were to increase any of her inputs. The Alliance Bank has
her value of the scale efficiency ? was at about 46 percent,
which means that the increment in her input with RM100 can only
produce her output of RM46.00 only (an amount of increment in
input does not produce the same amount of increment in output).
This happens to all Malaysian local commercial banks in 2001,
which include Bumiputra-Commerce Bank which was fully technical
efficient (at an isoquant with constant scale of return) but her
scale efficiency ? was only about 9 percent, which means that it
was not worth at all to increase her inputs. Other similar
conclusion and interpretations for other banks based on their
scale efficiencies (Table 2) can be made.
CONCLUSION
The majority (8 out of 11) of the local commercial banks in
Malaysia were (in 2001) operating on a diminishing scale of
return. The majority (9 out of 11) of the local commercial banks
were (in 2001) not operating at their isoquant. Only one of the
banks was fully efficient, namely the Hong Leong Bank. Their
profits for the year 2001 are shown in Appendix 3.
As shown in Appendix 3, Maybank was the bank with the highest
profit, whereas Affin Bank was the bank with the lowest profit
(making a loss). The profit of Hong Leong Bank was about 47
percent of the profit of Maybank; and the profit of
Bumiputra-Commerce Bank was just slightly higher than that of
the Ambank. However, as far as the efficiency of the banks is
concerned, this study shows that the efficiency of the banks
does not appear in the same order. In fact, the overall and
technical efficiencies of Maybank were lower than those attained
by the Arab-Malaysian Bank. Furthermore, our findings (and "The
Banker", 1998) show that the average overall and technical
efficiencies of the Malaysian local commercial banks were low,
which means that the level of competitiveness among them was
low.
This study, reflecting the same result found by "The Banker"
(1998), albeit for general Malaysian banks, shows that on
average the Malaysian local commercial banks were inefficient.
But comparing with "The Banker" (1998), our results show that
the Malaysian local commercial banks in the year 2001 were more
efficient than in previous years such as 1998. This is perhaps
due to the strong intervention of the Malaysian government
during the economic crisis around 2001.
It is interesting also to note that there are only three local
commercial banks (Arab-Malaysian Bank, Hong Leong Bank, and
Maybank) which were operating at a constant scale of return; and
there are two local commercial banks (Bank Utama and
Bumiputra-Commerce Bank) which were efficient while operating on
a non-constant scale of return, albeit with a very low rate of
return on further investments (increase on inputs will produce
an increase of 19 percent and 9 percent return respectively as
shown by their scale efficiencies in Table 2). The latter
contradicts the findings of Wheelock and Wilson (1995)
elsewhere, which showed that an efficient bank necessarily
operates on a constant scale of return.
Based on our model of efficiencies, the best bank in 2001 was
Hong Leong Bank (fully efficient in all types of efficiencies),
followed by Arab-Malaysian Bank (fully efficient in technical,
pure technical and scale efficiencies), Public Bank, Southern
Bank and the others. In particular, Affin Bank showed the worst
performance of them all.?
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Table 1
Minimum Inputs for Local Commercial Banks in Malaysia 2001 When Considering Profit as the Sole Profit of a Bank
Name Workers Assets (mini) Funds (mini) Loan (mini)
Numbering of (mini) = X2 (mini) =X3 (mini) =X4 (mini)
Banks = X1(mini) RM'000 RM'000 RM'000
1 AB 0 0.00 0.00 0.00
2 ABM 904 41,267.80 5,965,551.00 3,369,609.00
3 AMB 497 22,674.49 3,277,756.00 1,851,423.38
4 BCB 570 26,013.89 3,760,490.00 2,124,092.75
5 BU 93 4,240.10 612,936.56 346,213.94
6 EON Bank 492 22,472.65 3,248,579.75 1,834,943.00
7 HLB 3,336 152,258.00 22,009,964.00 12,432,211.00
8 MB 6,991 319,082.38 46,125,600.00 26,053,800.00
9 PB 2,779 126,842.95 18,336,040.00 10,357,015.00
10 RHB 2,268 103,519.17 14,964,423.00 8,452,575.00
11 SB 11,721 53,477.96 7,730,615.50 4,366,597.00
(Note that the full name of each bank is in Appendix 1)
TABLE 2
Various Efficiency Indices (Overall Efficiency y, Technical Efficiency t, Allocation Efficiency u, Pure Technical Efficiency
No. Banks y t u l k
1. Affin Bank (AB) 0 0 0 77.3 0
2. Alliance Bank Malaysia (ABM) 39.2 45.5 86.1 87.1 45.5
3. Arab-Malaysian Bank (AMB) 46.7 100.0 46.7 100 100
4. Bumiputra-Commerce Bank (BCB) 6.2 9.3 66.3 100 9.3
5. Bank Utama (BU) 9.3 18.6 50.1 100 18.6
6. EON Bank 20.0 22.2 90.1 68.9 22.2
7. Hong Leong Bank (HLB) 100 100 100 100 100
8. MayBank (MB) 36.1 43.8 82.5 100 100
9. Public Bank (PB) 36.1 52.0 69.5 55.5 52.0
10. RHB Bank 28.9 33.8 85.7 39.2 33.8
11. Southern Bank (SB) 37.7 50.5 74.8 82.1 50.5
Average (without AB) 36.0 47.6 75.2 83.3 47.6
Standard deviation (without AB) 77.5 29.5 16.4 20.8 29.5
TABLE 3
The Difference between the Actual Inputs and the Minimum Inputs for Local Commercial Banks in Malaysia 2001 Considering Profi
No. Banks N1-X1(mini) N2-X2(mini) N3-X3(mini) N4-X4(mini)
RM'000 RM'000 RM'000
1 AB 3,592 323,644.00 19,212,899.03 16,331159.00
2 ABM 2,141 69,032.20 7,154,098.00 7,755,083.00
3 AMB 719 -272.49 7,251,090.50 6,594,423.63
4 BCB 6,995 453,672.11 51,255,775.00 36,789,041.25
5 BU 1,235 18,443.90 7,278,297.44 5,348,630.06
6 EON Bank2,662 85,590.35 11,415,733.25 9,163,962.00
7 HLB 0.00 0.00 0.00 0.00
8 MB 13,321 665,820.63 59,088,507.00 56,238,994.00
9 PB 5,372 376,244.05 16,949,605.00 10,091,403.00
10 RHB 5,014 299,499.83 29,359,910.00 27,385,992.00
11 SB 1,615 137,850.04 7,592,702.50 8,499,312.00
Note: The full name of each bank is in Appendix 1
N1 = Actual workers; N2 = Actual Assets; N3 = Actual Funds; N4 = Actual Loans
TABLE 4
Minimum Total Expenses (in RM) of the Local Commercial Banks in Malaysia 2001 when Considering Profit as the Sole Output of a
Numbering Name of Minimum Actual The Difference
Banks Expenses (M) Expenses (A) A-M
1 AB 0 2,107,058,000 2,107,058,000
2 ABM 445,652,000 1,054,282,000 608,630,000
3 AMB 299,173,200 611,824,000 312,650,800
4 BCB 281,834,500 3,964,548,000 3,682,713,500
5 BU 51,668,850 495,081,000 443,412,150
6 EON Bank 195,779,900 843,585,000 647,805,100
7 HLB 1,334,968,000 1,334,968,000 0
8 MB 2,905,972,000 7,270,048,000 4,364,076,000
9 PB 937,702,100 2,289,422,000 1,351,719,900
10 RHB 900,835,100 2,757,687,000 1,856,851,900
11 SB 481,965,000 1,153,329,000 671,364,000
Note: The full name of each bank is in Appendix 1
APPENDIX 1
Actual Inputs For Local Commercial Banks in Malaysia 2001
Accumulated
Workers' Number of Fixed Assets Book Value of Funds Accumulated No.Banks Expenses Workers Expense
(RM'000) (RM'000) (RM'000) (RM'000) (RM'000)
1. AB 178,328 3,592 762,592 323,644 650,880 19,212,026
2.ABM 102,505 3,045 433,517 110,300 359,018 13,119,649
3.AMB 55,555 1,216 143,316 22,402 122,350 10,528,847
4.BCB 583,351 7,565 1,549,841 479,686 1,444,620 55,016,265
5.BU 60,085 1,328 111,628 22,684 97,274 7,891,234
6.EON Bank 137,097 3,155 305,240 108,063 262,018 14,664,313
7.HLB 138,975 3,336 421,969 152,258 357,057 22,009,964
8.MB 791,216 20,312 3,431,442. 984,903 3,102,395 105,214,107
9.PB 307,085 8,151 1,330,401. 503,087 1,254,863 35,285,645
10.RHB 354,419 7,282 1,108,159. 403,019 1,005,736 44,324,333
11.SB 124,423 2,787 527,732. 191,328 458,263 15,323,318
BU = Bank Utama; AB = Affin Bank; ABM = Alliance Bank Malaysia;
BCB = Bumiputra-Commerce Bank; HL = Hong Leong Bank;
MB = MayBank; PU Public Bank; SB = Southern Bank
APPENDIX 2
Data of Loans and Saving Demands for Local Commercial Banks in Malaysia 2001 (in RM'000)
No. Banks Commercial Housing
& Industrial Industrial Customers' Other Saving
Loans Loans Loan Loans Demands
1.AB 10,347,321 4,449,890 580,664 953,284 15,089,250
2.ABM 5,818,783 4,577,328 533,008 195,573 11,138,381
3.AMB 5,265,357 2,562,088 189,422 432,961 6,553,840
4.BCB 23,332,887 11,738,798 1,417,327 2,424,122 42,545,038
5.BU 3,659,408 1,508,959 1,299 525,178 6,951,964
6.EON Bank 5,833,946 3,986,763 696,302 481,894 10,031,318
7.HLB 6,252,395 4,042,842 1,448,645 688,329 17,251,650
8.MB 48,017,919 18,035,724 2,814,478 16,317,128 77,926,411
9.PB 9,353,147 8,296,077 1,648,241 1,150,953 29,953,328
10.RHB 24,821,081 8,512,109 1,177,495 1,252,248 33,983,099
11.SB 6,773,848 4,524,215 1,206,798 361,048 11,867,876
Note: The full name of each bank is in Appendix 1
APPENDIX 3
Actual Data for Interest Expenses, Total Loans, Loss & Loans Provision and Profits of The Local Commercial Banks in Malaysia
No. Banks Interest Expenses Total Loans Loss & Loans Profit before Tax
Provision + and Zakat
1 AB 518,165 16,331,159.00 826,301 -747,438
2 ABM 428,077 11,124,692.00 192,688 185,652
3 AMB 311,786 8,445,847.00 156,722 102,006
4 BCB 1,599,720 38,913,134.00 814,987 117,029
5 BU 194,860 5,694,844.00 188,593 19,075
6 EON Bank 385,638 10,998,905.00 152,707 101,098
7 HLB 541,563 12,432,211.00 232,321 684,965
8 MB 2,517,396 82,292,794.00 1,321,210 1,435,460
9 PB 901,988 20,448,418.00 57,033 570,630
10 RHB 1,146,514 35,838,567.00 503,014 465,703
11 SB 422,835 12,865,909.00 202,762 240,582
+ Risk undertaken by the bank for RM1 thousand of loan to a client
Note: The full name of each bank is in Appendix 1
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