Analysis Performance of Islamic Bank in Indonesia: Before and After the Spin Off

Pernamasari, Rieke

doi:10.24018/ejbmr.2020.5.4.452

Cited by 4 publications

(16 citation statements)

References 10 publications

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“…The efficiency level of Islamic banks is better after the spin-off than the previous condition (Rusydiana et al, 2019). (Nasuha, 2012;Pernamasari, 2020) show positive differences in performance on five aspects of financial ratios (CAR, NPF, FDR, ROA, and ROE) in spin-off Islamic banks. In addition, there are also differences between before and after the spin-off policy at the asset level (Khairunnisa & Khasanah, 2018) and deposit funds (Taga et al, 2019).…”

Section: Literature Reviewmentioning

confidence: 78%

Spin-off and efficiency in Islamic banks: DEA approach

Nabilah

Arif

2022

J. Eko. Keu. Isl.

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Purpose – This study aims to analyze the efficiency level of Islamic banks from spin-off and non-spinoff results and the impact of the separation policy and other factors that affect the efficiency level of Islamic banks.Methodology – This study uses a quantitative approach through data envelopment analysis to measure the efficiency level of Islamic banks and the difference-in-difference approach to examine the impact of separation and other factors that affect the efficiency level of Islamic banks. Data is collected directly from each of the six Islamic banks' financial statements.Findings – The results showed no difference in the efficiency level between before and after the spin-off policy at the spin-off bank. Furthermore, it was found that the efficiency level of spin-off Islamic banks was significantly lower than that of non-spinoff Islamic banks. Implication – This result implies that the rules regarding spin-offs should be evaluated. The spin-off policy must be a corporate action and not a regulation imposed by the regulator. Merger or conversion between sharia business units can be an alternative to improve the performance of sharia banking in Indonesia. Originality – Research on the impact of Islamic bank spin-off policies is still limited. Only a few studies analyze the efficiency level of Islamic banks as a result of spin-offs by measuring data analysis. Therefore, this research will contribute to research that discusses the spin-off policy of Islamic banks, especially the impact on efficiency and the factors that affect the level of efficiency.

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Section: Literature Reviewmentioning

confidence: 78%

Spin-off and efficiency in Islamic banks: DEA approach

Nabilah

Arif

2022

J. Eko. Keu. Isl.

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“…In the aspect of efficiency, based on the ability to generate income from assets (TATR), it is revealed that BNIS is increasingly efficient [22]. This is confirmed by the results of an increasingly efficient DEA analysis [23,24], although some studies reveal that BRIS is more inefficient than before the spin-off [18,25,26]. Similar conditions were also found in the profitability ratios (NPM and ROA) [18,20,27], asset growth, third party funds, financing [19], market share [22], financing productivity [23], and productivity of social funds management [28].…”

Section: Bank Bni Syariahmentioning

confidence: 85%

“…The financial performance of BNIS has been observed by 11 researchers. BNIS' capital adequacy has increased after the spin-off [18], although many studies have revealed that there is no significant change [19][20][21]. In the aspect of efficiency, based on the ability to generate income from assets (TATR), it is revealed that BNIS is increasingly efficient [22].…”

Section: Bank Bni Syariahmentioning

confidence: 99%

“…As for business risk, the two studies found contradictory results. Pernamasari [18] revealed that the risk of non-performing financing was lower after the spin-off, while Nasuha [19] found BRIS to be more vulnerable with increasing non-performing financing. This fact is caused by the difference in the research time span where Pernamasari [18] uses a longer time span and it is suspected that the data shows a better change in performance.…”

Section: Bank Bni Syariahmentioning

confidence: 99%

“…Most showed a decline in performance, but market share, financing growth, and financing productivity at BRIS increased after the spinoff [19,22,23]. On the profitability side, there are two different conditions, the increase in performance was found in the ability to generate net income (NPM) and the ability to benefit from managed assets (ROA) [18,29], while the ability to earn profits from capital (ROE) decreased [30].…”

Section: Bri Syariahmentioning

confidence: 99%

See 2 more Smart Citations

Restructuring Strategy: A Performance Review of Spin-off Islamic Banks in Indonesia

Pambuko,

Medias,

Dewi

et al. 2024

E3S Web Conf.

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The deadline of 2023 has almost passed for the obligation to conduct a spin-off for sharia business units in Indonesia to become a fully-fledged Islamic bank. However, a number of empirical findings highlight the urgency of evaluating this policy. Furthermore, many sharia business units are unable to meet the minimal standards. The paper aims to review prior studies on how spin-off decisions affect the financial performance of spin-off Islamic banks in Indonesia. Information was gathered from the Google Scholar and Mendeley databases using a literature review methodology. This study reveals that 18 publications have tracked 10 Islamic spin-off banks and 18 financial performance indicators. Following the spin-off, six Islamic banks, including BNI Syariah, BRI Syariah, BJB Syariah, Bank KB Bukopin Syariah, BTPN Syariah, Bank Aceh Syariah, BCA Syariah, Bank Syariah Mandiri, and Panin Dubai Syariah Bank, experienced an improvement in their financial performance. Assets, third party funds, financing, market share, CAR, NPF, ROA, z-score, and Maqasid Sharia Index were the main performance indicators that experienced a significant improvement after the spin-off.

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Influence of spin-off decision on financing risk: Empirical insight from Indonesian Islamic banks

Pambuko,

Sriyana,

Affandi

et al. 2024

F1000Res

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Background Spin-offs play a significant role in organizational development strategies, particularly in Islamic banking, by fostering entrepreneurship, innovation, and Shariah-compliant management practices. Indonesia stands as a pioneer in implementing the dual banking system and has established a spin-off policy to foster the growth of Islamic banking. This study investigates whether the spin-off decision has a significant impact on financing risk in Indonesian Islamic banks. Methods Financing risk is measured by the non-performing financing ratio, while the spin-off decision is represented by a dummy variable equal to 1 for the post-spin-off period and 0 for the pre-spin-off period. This study utilizes data from semi-annual reports of 35 Indonesian Islamic banks and analyzes it using a dynamic panel model with the Generalized Method of Moments (GMM). Results The findings reveal that spin-offs significantly reduce financing risk, thereby enhancing the financial resilience and boosting investor appeal. Notably, this implies that Islamic banks operating as Islamic windows exhibit a higher level of financing risk compared to fully-fledged Islamic banks. Furthermore, a noteworthy pattern emerges that spin-off Islamic banks with substantial assets demonstrate greater risk in comparison to their counterparts with more modest assets. System GMM also confirmed the result. Conclusions Islamic banks can significantly reduce their financing risks by establishing independent Islamic banks, or spin-offs. Unlike Islamic windows, which are typically integrated within conventional banks and face higher risk levels, standalone Islamic banks offer greater flexibility and control over their operations.

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Analysis Performance of Islamic Bank in Indonesia: Before and After the Spin Off

Cited by 4 publications

References 10 publications

Spin-off and efficiency in Islamic banks: DEA approach

Spin-off and efficiency in Islamic banks: DEA approach

Restructuring Strategy: A Performance Review of Spin-off Islamic Banks in Indonesia

Influence of spin-off decision on financing risk: Empirical insight from Indonesian Islamic banks

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