Spin-off and efficiency in Islamic banks: DEA approach

Nabilah, Nabilah; Arif, Muhammad

doi:10.20885/jeki.vol8.iss2.art4

Cited by 6 publications

(9 citation statements)

References 37 publications

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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%

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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Section: Bank Bni Syariahmentioning

confidence: 85%

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 profitability and efficiency of Islamic banks have been found to decrease after they go through spin-off, as noted in various studies by Poerwokoesoemo (2016) and Hosen & Rahmawati (2016). Spin-off banks exhibit lower levels of efficiency compared to non-spinoff banks (Al Arif & Nabilah, 2022). Small-sized banks, especially regional banks, are particularly vulnerable to the negative impacts of spin-off policy, as stated by Haribowo (2017).…”

Section: Literature Reviewmentioning

confidence: 90%

The impact of conversion on market share in Indonesian Islamic banks

Arif

Ihsan

Zulpawati³

et al. 2023

Banks and Bank Systems

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The process of converting a conventional bank into a fully-fledged Islamic bank is becoming a popular alternative solution, alongside spin-off, for smaller banks. Two Indonesian banks, Bank of Aceh Sharia and Bank of NTB Sharia, completed this conversion in 2016 and 2018, respectively. This study uses a mixed-methods approach to examine the impact of this conversion on market share, using both quantitative regression with a dummy variable and qualitative analysis through focus group discussions with executive management and in-depth interviews with the Sharia supervisory boards of the two converted banks. The study found that the conversion positively impacted market share, with the default rate and level of capital also playing a role. Prior to conversion, the Indonesian sharia banking industry had less than a 5% market share, but after the conversion, it reached 6.7%. The two converted banks were able to increase their market share to 7% and 2%, respectively. These results suggest that converting into a full-fledged Islamic bank is a viable alternative solution for smaller conventional banks, rather than opting for spin-offs or mergers.

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“…In general, the findings from these studies showed that Islamic bank spin-offs impacted banking performance in Indonesia, both in new Islamic banks from spin-off policy (Kuncoro & Yulianto, 2018;Nasuha, 2012) and in abandoned conventional banks themselves (Poerwokoesoemo, 2016). Specifically for Islamic banks, the impacts included an increase in third-party funds or deposits (Al Arif, 2014Arif, , 2018bNasuha, 2012), increasing profitability (Hamid, 2015;Ramdani, 2015), and increasing market structure and power (Al Arif, 2018b;Rayyani et al, 2022), but decrease in efficiency (Al Arif, 2015a;Hadziq et al, 2022;Nabilah & Al Arif, 2022;Rusydiana et al, 2019). As for financing, some studies found that spin-offs impacted the financing provided (Nasuha, 2012).…”

Section: Islamic Bank Spin-off Study On Sinta Indexed Journalsmentioning

confidence: 99%

“…Regardless of whether it is significant or not, all existing findings showed that spin-offs reduced the efficiency of Islamic banks (Al Arif, 2015a;Al Arif et al, 2019;Hadziq et al, 2022;Nabilah & Al Arif, 2022;Rusydiana et al, 2019;Trinugroho et al, 2021). However, in terms of assets, the spin-off had no impact on Islamic bank assets (Al .…”

Section: Spin-off and Performance/efficiency Of Islamic Banksmentioning

confidence: 99%

Islamic bank spin-off: a systematic literature review

Yusuf

Abduh

Sofyani

2023

JAI

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Research aims: This study aims to explore the extent of studies related to Islamic bank spin-offs in reputable journals indexed by Sinta and Scopus to map important findings regarding Islamic bank spin-offs.Design/Methodology/Approach: This study employed a systematic literature review method consisting of three stages: collection, assessment, and presentation. The collection stage was conducted using the Publish or Perish search engine with the Google Scholar and Scopus databases. The assessment stage was performed using the websites https://sinta.kemdikbud.go.id and https://www.scimagojr.com/. The presentation stage was carried out to find three objectives: research background, methods, and findings related to the Islamic bank spin-off.Research findings: Since 2010, at least 24 papers indexed by Sinta and ten papers indexed by Scopus have discussed the issue of the Islamic bank spin-off. These studies were oriented toward two disciplines: law and economics. The most widely used method was quantitative. Broadly speaking, the findings from the spin-off study of Islamic banks can be generalized into four discourses: policy, the market for Islamic banks, performance/efficiency of Islamic banks, and several other matters. Lastly, from the four discourses above, the authors suggest eight future studies that are still interesting to study.Theoretical contribution/Originality: By mapping important findings related to the Islamic bank spin-off along with eight suggested future studies, this research’s results are expected to be a reference and inspiration for scholars in conducting further research related to the Islamic bank spin-off.

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Spin-off and efficiency in Islamic banks: DEA approach

Cited by 6 publications

References 37 publications

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

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

The impact of conversion on market share in Indonesian Islamic banks

Islamic bank spin-off: a systematic literature review

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