ABSTRACT
This study evaluates the efficiency and productivity of Islamic banks in Indonesia, Malaysia, and Turkey by analysing financial data from 27 Islamic banks over the 2013–2019 period using the Data Envelopment Analysis (DEA) and Malmquist Productivity Index (MPI) methods. Input variables include personnel expenses, administrative costs, and deposits, while output variables encompass financing and operational income. The findings reveal distinct efficiency patterns, with Turkey demonstrating the highest average efficiency and Indonesia showing the most substantial productivity growth. Key challenges were identified: financing and operational earnings in Indonesia and Malaysia, and administrative costs in Turkey. Bank BJB Syariah emerged as a benchmark in 2016, with technological advancements and efficiency improvements driving productivity growth, as reflected in the mean TFPCH scores. The Malmquist Index quadrant analysis placed Islamic banks in Indonesia and Malaysia primarily in Quadrants 3, 1, and 4. These insights underscore the need for tailored strategies to enhance performance across varied regulatory and market contexts. The study’s implications extend to policymakers, regulators, and stakeholders, offering actionable recommendations for optimising operational frameworks, fostering innovation, and strengthening the role of Islamic banks in sustainable economic development.