Cover Image

Islamic banks vs conventional banks in Indonesia: an analysis on financial performances

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 bankin...

Full description

Saved in:
Bibliographic Details
Main Authors: Sukmana, Raditya, Febriyati, Nur Ahlina
Format: Article
Language:English
Published: Penerbit Universiti Kebangsaan Malaysia 2016
Online Access:http://journalarticle.ukm.my/10812/1/9450-48414-1-PB.pdf
http://journalarticle.ukm.my/10812/
http://ejournal.ukm.my/pengurusan/issue/view/856
Tags: Add Tag
No Tags, Be the first to tag this record!
id my-ukm.journal.10812
record_format eprints
spelling my-ukm.journal.108122017-10-11T07:56:36Z http://journalarticle.ukm.my/10812/ Islamic banks vs conventional banks in Indonesia: an analysis on financial performances Sukmana, Raditya Febriyati, Nur Ahlina 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. Penerbit Universiti Kebangsaan Malaysia 2016 Article PeerReviewed application/pdf en http://journalarticle.ukm.my/10812/1/9450-48414-1-PB.pdf Sukmana, Raditya and Febriyati, Nur Ahlina (2016) Islamic banks vs conventional banks in Indonesia: an analysis on financial performances. Jurnal Pengurusan, 47 . pp. 81-90. ISSN 0127-2713 http://ejournal.ukm.my/pengurusan/issue/view/856
institution Universiti Kebangsaan Malaysia
building Perpustakaan Tun Sri Lanang Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Kebangsaan Malaysia
content_source UKM Journal Article Repository
url_provider http://journalarticle.ukm.my/
language English
description 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.
format Article
author Sukmana, Raditya
Febriyati, Nur Ahlina
spellingShingle Sukmana, Raditya
Febriyati, Nur Ahlina
Islamic banks vs conventional banks in Indonesia: an analysis on financial performances
author_facet Sukmana, Raditya
Febriyati, Nur Ahlina
author_sort Sukmana, Raditya
title Islamic banks vs conventional banks in Indonesia: an analysis on financial performances
title_short Islamic banks vs conventional banks in Indonesia: an analysis on financial performances
title_full Islamic banks vs conventional banks in Indonesia: an analysis on financial performances
title_fullStr Islamic banks vs conventional banks in Indonesia: an analysis on financial performances
title_full_unstemmed Islamic banks vs conventional banks in Indonesia: an analysis on financial performances
title_sort islamic banks vs conventional banks in indonesia: an analysis on financial performances
publisher Penerbit Universiti Kebangsaan Malaysia
publishDate 2016
url http://journalarticle.ukm.my/10812/1/9450-48414-1-PB.pdf
http://journalarticle.ukm.my/10812/
http://ejournal.ukm.my/pengurusan/issue/view/856
_version_ 1643738262377857024
score 13.211869

Similar Items