Is Islamic banking stronger than conventional banking during the Covid-19 pandemic? Evidence from Indonesia

Wijana, I Made Dauh; Widnyana, I Wayan

doi:10.20885/jeki.vol8.iss1.art9

Cited by 5 publications

(4 citation statements)

References 0 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Therefore, the findings of this study are comparable to past studies conducted by Abdulla and Ebrahim (2022). However, it differed from the findings reported in past research (Aliyah and Syariah, 2022;Wijana and Widnyana, 2022). In the troubled financial environment and high business uncertainties, businesses were less likely to take out new loans for expansion or investment, thus lowering loan demand.…”

Section: Net Interest Marginsupporting

confidence: 61%

The Comparative Performance of Sharia and Conventional Banks During the Pandemic: Analysis of Indonesian Banks

Tanjung,

Varianto

2024

JAM

View full text Add to dashboard Cite

The banking industry serves a crucial role in the economy. Unpredictable conditions, such as the COVID-19 outbreak, have had a widespread effect on global health and banking. The study examines the performance differences between conventional and Sharia banks in the pre-pandemic and during the pandemic. In addition, the study also assesses whether conventional banks are more resilient during times of crisis compared to Sharia banks or vice versa. This quantitative study uses a paired sample T-test as the research method. Secondary data from Indonesian Banking Statistics were used in this study. Data was collected two years before the COVID-19 pandemic (2018-2019) and during the COVID-19 pandemic (2020-2021). Regarding ROA and NPL, the results show that Sharia banks did better than conventional banks during the crisis. Conventional banks suffered a deteriorating CAR and NIM during 2020-2021. Even though this study shows that the financial performance ratios of both types of banks go up and down in different ways, the overall financial performance ratios are still within the limits set by Bank Indonesia. This study supports the central bank and financial service authority's strategy and measures in sustaining the financial service industry during a troubled time like the pandemic in 2020-2021 based on these notions. In conclusion, we emphasize the importance of bank management exercising greater caution in allocating funds to corporations and effectively monitoring their debtors to mitigate the risk of a rising non-performing loan ratio.

show abstract

Section: Net Interest Marginsupporting

confidence: 61%

The Comparative Performance of Sharia and Conventional Banks During the Pandemic: Analysis of Indonesian Banks

Tanjung,

Varianto

2024

JAM

View full text Add to dashboard Cite

show abstract

“…Nabi et al l (2022) state that Islamic banks have better resilience to external conditions than conventional banking. Likewise, during the Covid-19 Pandemic, Islamic banks are considered superior to conventional banks both before and during the Covid-19 Pandemic (Wijana & Widnyana, 2022). These studies proved that Islamic banks in Indonesia are deemed to have good resilience in facing economic shocks due to the pandemic.…”

Section: Literature Reviewmentioning

confidence: 81%

“…In Indonesia, the pandemic affected companies' financial stability, particularly those listed on the Jakarta Islamic Index (Trisnowati et al, 2021). Furthermore, the pandemic also slightly shaken Islamic banking negatively (Arafat et al, 2021;Wijana & Widnyana, 2022).…”

Section: Introductionmentioning

confidence: 99%

Are Islamic Banks Still Sound Amidst Pandemic?

Canggih

Nurafini²,

Suryaningsih³

et al. 2022

View full text Add to dashboard Cite

The paper aims to check whether Islamic banks in Indonesia remain sound amid the Covid-19 Pandemic by comparing the soundness levels of Islamic commercial banks before and during the Covid-19 Pandemic. This research used a quantitative approach with the non-parametric Wilcoxon Signed-Rank Test to compare bank soundness before and during the Covid-19 Pandemic. The bank's resilience was measured using the Risk-Based Bank Rating (RBBR), e.g., Non-Performing Finance (NPF), Finance to Deposit Ratio (FDR), Capital Adequacy Ratio (CAR), and Net Operating Margin (NOM). The study exempted aspects of Good Corporate Governance since it is qualitative. The study used quarterly data in 2018-2019 (before the pandemic) and 2020-2021 (during the pandemic). The results showed a significant difference between CAR before and during the Covid-19 Pandemic. Meanwhile, NPF, FDR, ROA, and NOM showed no significant differences before and during the Covid-19 Pandemic. Based on the results, it can be concluded that the Covid-19 Pandemic generally does not affect the Islamic banks' soundness level, except for capital. It showed that the Islamic Bank proved to be resilient against crises. The study adds literature on the resilience of Islamic banks, particularly during the Covid-19 Pandemic, and validates the RBBR measurement to analyze the bank's soundness. In addition, the results of this study are also expected to be a consideration for policymakers to design the right policies for optimizing Islamic banks to thrive and support post-pandemic recovery.

show abstract

“…However, Islamic banking indicators conflict with general data: average ROA (0.62%) and BOPO (0.04%). Meanwhile, the Loan Deposit Ratio (LDR) only fell (by 0.35%) or lower than banking in general (Wijana & Widnyana, 2022). Financial ratios are needed to determine the performance of Sharia banking during the pandemic.…”

Section: Muhamad Irfan Florid Pupung Purnamasarimentioning

confidence: 99%

The Impact of Non-Performing Loan, Loan to Deposit Ratio, and Operational Cost to Operating Income Ratio on Financial Performance

Irfan Florid,

Purnamasari

2023

JWS

View full text Add to dashboard Cite

Various events can pose risks to the quality of Islamic banking, both globally and bring improvements and enhancements to the quality of Pandemic Covid-19, which was identified entering Indonesia since March 2, 2020, has significantly reduced economic activities, especially with the implementation of Large-Scale Social Restrictions (PSBB) since April 10, 2020. The objective of this research is to understand and analyze the impact of non-performing loans, loan to deposit ratio, operational cost to operational income on financial performance. The method used in this research is quantitative data method with hypothesis testing, employing multiple linear regression using cross-data and time series. Data management in this research is assisted using the Statistica Program for Social Science (SPSS) Version 23. The research results show that Non-Performing Loan (NPL) has a negative impact on Return On Asset (ROA), Loan to Deposit Ratio (LDR) negatively influences Return On Asset (ROA), Operational Cost to Operational Income (BOPO) has a positive impact on Return On Asset (ROA), and simultaneously the variables Non-Performing Loan (NPL), Loan to Deposit Ratio (LDR), and Operational Cost to Operational Income (BOPO) affect Financial Performance (ROA) in Islamic Commercial Banks from 2018 to 2021. Islamic Commercial Banks are expected to be more cautious in providing financing, as the researched data shows that the level of Non-Performing Loan (NPL) ratio significantly affects the financial performance (ROA) of Islamic banks.

show abstract

Is Islamic banking stronger than conventional banking during the Covid-19 pandemic? Evidence from Indonesia

Cited by 5 publications

References 0 publications

The Comparative Performance of Sharia and Conventional Banks During the Pandemic: Analysis of Indonesian Banks

The Comparative Performance of Sharia and Conventional Banks During the Pandemic: Analysis of Indonesian Banks

Are Islamic Banks Still Sound Amidst Pandemic?

The Impact of Non-Performing Loan, Loan to Deposit Ratio, and Operational Cost to Operating Income Ratio on Financial Performance

Contact Info

Product

Resources

About