The comparison of islamic and conventional banking in ownership structure and interest rates in Indonesia (original) (raw)
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A Comparative Analysis of Determinants of Islamic and Conventional Banking Performances in Indonesia
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This study attempts to explore comparatively the determinants of financial performances between the conventional and Islamic banks in Indonesia. The determinants investigated in the study include liquidity, non-performing financing, capital adequacy, and operational cost. The samples of this study are three state-owned conventional banks and three Islamic banks that were selected by the purposive sampling technique. Based on the panel regression analysis, the study found that, for the conventional banks, capital adequacy, liquidity, and operational cost had significant influences on banks' performances, while the non-performing loan had an insignificant effect. On the other hand, for the Islamic banks, the liquidity, non-performing financing, and operational cost had significant influences on banks' performance, while capital adequacy had an insignificant effect. These findings provide important implications for the respective banks to design a proper financial policy to enhance their performances by focusing on the significant determinants affecting banks' performances.
International Journal of Academic Research in Business and Social Sciences, 2013
A unique characteristic of Indonesian banking system is the existence of community development banks, which is owned by local governments. This study examines the performance of this type of banks compared to private and federal government banks. The sample of this study consists of 15 community development banks, 56 private banks, and 3 federal government banks from 1995 to 2006. Using the independent t-test appropriate methodology. The financial performance of banks is measured in terms of profitability, capital structure, banks risk, efficiency, size and deposits measures. Government banks are about 11 times larger than community development banks and private banks. Subsequently, they have the greatest amount of current assets, debt, deposit, financing, and operational costs. However, in term of profits, either operational or net, their amount is not statistically different from the other two types of banks. In fact, in term of net profit, only community development banks show positive amount. Net profit between community development banks and private banks is significantly different. Community development banks have better ROA than government or private banks but the different is only significant between community development banks and private banks. In term of ROE, government banks have the highest ROE but it is not statistically significantly different to community development banks. ROE of either
Islamic Banks vs Conventional Banks in Indonesia: An Analysis on Financial Performances
Jurnal Pengurusan, 2016
Islamic banks in Indonesia havebeen in existence for more than two decades. Substantial development has taken place in this largest Muslim country. Regulator, academicians, and practitioners have been providing significant support with the objective of improving the performance of the Islamic banking. Hence, it is timely to assess whether its performance differs than that of the conventional banks. This paper aims to describe and critically evaluate and compare the financial performance of Islamic banks to that of conventional banks. Data of Capital Adequacy Ratio (CAR), Return on Asset (ROA), Operational Cost/ Operational Revenue (BOPO), Non-Performing Loan (NPL) /Non Performing Financing (NPF) and Loan Deposit Ratio (LDR)/ Financing Deposit Ratio (FDR) for Islamic and conventional banks are examined. The analysis of monthly data covers the period from January 2004 to July 2014 (127 observations). Paired sampled t-test was adopted to see whether there are significant differences in the financial ratios between both banks. This study found that CAR, ROA, BOPO and NPL of conventional banks are significantly higher than that of Islamic banks but not FDR. Based on the result of capital adequacy, the findings suggest that Islamic banks need to have more capital to face the involved risk as that of conventional banks. Conventional banks need to function them selves as financial intermediaries to support the real sector as that of Islamic banks.
Financial Performance Determinant of Islamic Banking in Indonesia
Jurnal Keuangan dan Perbankan, 2018
The rapid growth of Islamic banks also occured in Indonesia. The high growth of Islamic banks' assets gave opportunities to increase bad debt (non-performing financing). We examined the impact of good corporate governance (GCG), number of sharia supervisory board (SSB), financing to deposit ratio (FDR), profit and loss sharing (PLS) financing ratio, profit sharing rate of financing, and temporary syirkah fund ratio on the performance of non-performance financing (NPF) and return on assets (ROA). This research also tested the influence of NPF on ROA. The population of this research was Islamic commercial banks in Indonesia with the observation ranged from 2009-2016. The samples were determined by using a purposive sampling method. Data analysis used a structural equation model with WarpPLS. We proved that empirically GCG disclosure did not affect NPF. NPF bank was influenced by PLS financing and temporary syirkah fund ratio. PLS financing income and FDR financing did not affect the NPF. Moreover, GCG, SSB, temporary syirkah fund, and NPF disclosures influenced profitability
Do Ownership Make a Different Performance? (Evidence from Indonesian Banks)
Test Engineering and Management, 2020
Policy making in determining the direction and objectives of the banking system is certainly influenced by those who dominate ownership.Indonesia is one of the developing countries in Asia that has experienced an economic crisis since 20 years ago andsince 2000s the crisis period ended. This phenomenon is very interesting to be discussed further related to banking ownership. This study aims to examine the role of ownership structure on banking performance. Using MANOVA estimation of panel data for 100 banks in Indonesia, this study examined the effect of ownership structure (i.e. government ownership, domestic private ownership, and foreign ownership)on bank performance (i.e.profitability, credit quality, liquidity, and quality of earnings assets). The results indicate that government-owned banks have the best performance in terms of profitability. In terms of liquidity and earnings assets, foreign banks are better than government-owned or domestic private-owned banks. In terms of credit quality, all banks have the same performance.
A Comparative Study of Financial Performance of Islamic Banks and Conventional Banks in Indonesia
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The paper compared and examined financial performance of Islamic banks against conventional banks before and after the enactment of Indonesia’s Islamic Banking Act No. 21/2008. The law aims to strengthen the regulatory environment for further growth of Indonesia’s market Islamic finance. The data was based on selected financial statements of Islamic commercial banks in Indonesia from year 2000 to 2007. Financial performance measures were expressed in terms of various financial ratios in which were categorized into profitability, liquidity, risk and solvency and efficiency. To test the hypotheses, Mann-Whitney was employed to compare financial performance of Islamic banks and conventional banks. In general, the study found no major difference in financial performance between Islamic banks and conventional banks, except in terms of its liquidity. This indicated that Islamic banks are generally more liquid as compared to conventional ones.
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One of the unique banking in Indonesia is a Regional Development Banks (RDB), which is a districts government-owned bank. Indonesia banks have Islamic banking units, where the status usually in division and business unit of the Bank’s parent (conventional). But there are no funds will be mixed with the conventional, because they have a different system of financial records between sharia units and conventional units. The purpose of this study is to comparing the performance of RDB and private banks which has Islamic banking units. The population and sample consists of 24 Islamic business units Regional Development Banks (RDB) and private owned banks. From the 24 banks, only 18 banks were selected to be the sample. The banks are 7 private banks and 11 regional development banks. The period of this study is from 2010 to 2014. Data are taken from the bank’s annual reports. This study using panel data and using pooled Ordinary Least Squares (OLS), random effect and fixed effect analysis...
Determinants of Islamic Banking Performance: An Empirical Study in Indonesia
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This study aimed to examine the effects of Capital Adequacy Ratio (CAR) and Good Corporate Governance (GCG) on Return On Asset (ROA) with Non-Performing Financing (NPF) as a moderating variable. The sample used in this study is 14 Islamic commercial banks listed on Bank Indonesia from 2014-2018. The sampling technique used in this research is purposive sampling with the type of data used in this research is panel data. To analyze the data, the researchers use a statistical test that includes classical assumption test, t-test, F-test, the coefficient of determination (R2), and Moderated Regression Analysis (MRA). The process of data analysis is using a means of IBM SPSS Statistics 23. The results of this study show that CAR has a negative and significant effect on ROA, and GCG does not have a substantial impact on ROA. This study indicates that NPF is unable to moderate the effect of CAR on ROA. However, NPF is significantly able to moderate the effect of GCG on ROAAbstrakPenelitian...
This study aims to examine the impact of market structure and market behavior on the Islamic banking performance in Indonesia. Using the SCP model framework, this study examines five largest Islamic banking in Indonesia. The result reveals that market behavior, Islamic banking performance, third party funds, the business scale and the target market of Islamic banking have a significant impact on the market structure of Islamic banking industry; the market structure, performance of Islamic banks, types of financing product, profit sharing rate and distribution scale have a significant impact on the behavior of Islamic banking industry; and the market structure, market behavior, human resources development, the quality of Islamic banks' financing and the credibility of Islamic banking financing have a significant impact on Islamic banking performance in Indonesia.
Analysis of the Effectiveness of Islamic Banks in Indonesia Period 2010-2019
SHS Web of Conferences
The purpose of this study is to analyze the activities of Indonesian sharia banking institutions before the merger. BSI of state-to-state bank financial ratios revealed in Sharia Bank report. The design/methodology/approach used was regression analysis of panel data, which is a combination of time series data over time periods. Cross- sectional data comprising 2010-2019 and Muamalata. Shariah, BNI Shariah, BRI Shariah, Maybank Shariah, Mega Shariah, BCA Shariah. Conclusion. The results of this study show that the variables CAR and NIM partly differ. This has major consequences for the efficiency (ROA) of Islamic banks. Variables NPF and FDR also have a significant impact on bank performance (ROA) in part.