The determinant factors of efficiency on Islamic banking and conventional banking in Indonesia

Majdina, Nur; Munandar, Jono M; Effendi, Jaenal

doi:10.26905/jkdp.v23i3.3157

Cited by 10 publications

(16 citation statements)

References 14 publications

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“…Credit risks in those contracts are in the form of the inability of the debtor to fulfill the obligation to the bank on the maturity dates and it will have an impact on the loss of Islamic banks (Al-Wesabi & Ahmad, 2013). According to Majdina, Munandar, & Effendi (2019), Islamic banks should manage the strategy of funds' distribution to improve their performance. Mokni et al (2014) who summarize some previous studies about the types of risks that dominate the banking industry, state that the ability to analyze credit risk will affect the ability of the Islamic bank to manage risk efficiently.…”

Section: Figure 2 the Proportion Of Financing In Islamic Banksmentioning

confidence: 99%

“…Further, Soekapdjo et al (2018) state that the higher NPF of Indonesian Islamic banks because of the new operational experience of Islamic banks and the limited ability of employees in the financing distribution. Majdina, Munandar, & Effendi (2019) state that Islamic banks may face potential losses due to high NPF and it can impact on the bad performance of Islamic banks. The performance of the bank to manage the NPF will influence the overall financial performance of Islamic banks.…”

Section: Introductionmentioning

confidence: 99%

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Board of directors and credit risk: An empirical study of Indonesian Islamic banks

Nugraheni

Muhammad

2019

Jurnal Keuangan Dan Perbankan

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Credit risk is the primary risk in the banking industry related to its function in distributing credit to customers. Decreasing credit risk is the main duty of the management of banks. We examine the relationship between the Board of Directors (BOD) characteristics and credit risk in the Indonesian Islamic bank. BOD characteristics consist of BOD size, educational qualification, number of meetings, and expertise. The samples in this study are full-fledged Islamic banks in Indonesia that publish annual reports for the year 2013-2017. The data are processed using panel data regression. We indicate that the number of BOD meetings has a negative influence on credit risk, BOD size has a positive influence on credit risk while educational qualification and expertise do not influence credit risk of Islamic banks in Indonesia. Understanding BOD characteristics and credit risk are useful to mitigate the implementation of corporate governance for Islamic banks in the two-tier board system. The findings are expected to have a contribution to strengthening the BOD's role to encourage the better performance of Islamic banks. AbstrakRisiko kredit merupakan risiko utama dalam industri perbankan terkait dengan peran bank sebagai penyalur kredit kepada masyarakat. Mengurangi risiko kredit menjadi tugas utama manajemen bank. Kami menguji hubungan antara karakteristik dewan direksi (BOD) dan risiko kredit pada bank umum syariah di Indonesia. Karakteristik BOD terdiri dari ukuran BOD, kualifikasi pendidikan, jumlah rapat, dan keahlian. Sampel dalam penelitian ini adalah bank umum syariah di Indonesia yang mempublikasikan laporan tahunan tahun 2013-2017. Data dianalisis menggunakan regresi data panel. Kami menunjukkan bahwa jumlah rapat direksi memiliki pengaruh negatif pada risiko kredit, ukuran direksi berpengaruh positif pada risiko kredit sedangkan kualifikasi pendidikan dan keahlian tidak memengaruhi risiko kredit bank syariah di Indonesia. Memahami karakteristik BOD dan risiko kredit bermanfaat untuk memitigasi penerapan tata kelola di bank umum syariah. Penelitian ini diharapkan dapat berkontribusi dalam memperkuat peran BOD untuk mendorong kinerja bank syariah yang lebih baik.

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Section: Figure 2 the Proportion Of Financing In Islamic Banksmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Board of directors and credit risk: An empirical study of Indonesian Islamic banks

Nugraheni

Muhammad

2019

Jurnal Keuangan Dan Perbankan

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“…On another hand, some empirical literature indicates that the Islamic banks' stability is worse than conventional banks because moral hazard and asymmetric information bear on the profit-and-loss sharing system (Kabir, Worthington, & Gupta, 2015;Lassoued, 2018). Volume 24, Issue 1, January 2020: 40-52 | 42 | 2016; Setyawati et al 2017;Sriyana, 2015;Widarjono, 2018;Risfandy, 2018;Octavio & Soesetio, 2019), efficiency of Islamic banks (Hosen & Rahmawati 2016;Aisyah & Hosen, 2018;Majdina, Munandar, & Effendi, 2019) and credit risk of Islamic banks (Firmansyah, 2015;Husa & Trinarningsih, 2015;Nugraheni & Muhammad, 2019). Our present study examines Islamic banks' financial stability in Indonesia.…”

Section: Introductionmentioning

confidence: 99%

Stability of Islamic banks in Indonesia: Autoregressive Distributed Lag Approach

Widarjono

2020

Jurnal Keuangan Dan Perbankan

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Islamic banks in Indonesia are very vulnerable to the instability of their business processes because of their small market share. Moreover, based on their financial performances, Islamic banks are worse than those of conventional banks due to lower profits (ROA) and higher Non-performing financing (NPF). Our study investigates the stability of Islamic banks. We measure the stability using Z-score and NPF. Instead of an individual bank, the study applies an aggregate data of Islamic banks encompassing Islamic commercial banks along with Islamic business units. Monthly time series data, covering January 2010 to December 2018 are selected. We apply the Autoregressive Distributed Lag (ARDL) model. The findings document that the Islamic bank's specific variables affecting stability are size, CAR, and efficiency. The larger size and CAR support the Islamic bank's stability. Lower efficiency increases the Islamic bank's instability. Meanwhile, Inflation and exchange rates affect the Islamic bank's stability. Economic downturns due to inflation and depreciation of rupiah increase the instability of Islamic banks. AbstrakBank Islam di Indonesia sangat rentan terhadap ketidakstabilan proses bisnis mereka karena pangsa pasar yang kecil. Selain itu, berdasarkan kinerja keuangan mereka, bank syariah lebih buruk daripada bank konvensional karena laba lebih rendah (ROA) dan pembiayaan bermasalah (NPF) lebih tinggi. Penelitian ini menyelidiki stabilitas bank Islam. Stabilitas keuangan diukur dengan menggunakan Z-score dan NPF. Penelitian ini menggunakan data agregat bank syariah yang mencakup bank komersial syariah bersama dengan unit bisnis syariah. Data yang digunakan adalah bulanan dari Januari 2010 hingga Desember 2018. Penelitian ini mengaplikasikan model Autoregressive Distributed Lag (ARDL). Temuan penelitian ini mendokumentasikan bahwa variabel spesifik bank Islam yang memengaruhi stabilitas adalah besarnya asset, CAR, dan efisiensi. Aset dan CAR yang tinggi mendukung stabilitas bank syariah. Efisiensi yang lebih rendah meningkatkan ketidakstabilan bank syariah. Sementara itu, inflasi dan nilai tukar memengaruhi stabilitas bank Islam. Penurunan ekonomi akibat inflasi dan depresiasi rupiah meningkatkan ketidakstabilan bank Islam.

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“…In Indonesia, Pramuka (2011) found that an Islamic bank with a "full-fledged" scheme was more efficient than another one with an "Islamic window" scheme. Majdina et al (2019) found a significant difference in efficiency in IBs and CBs: ROA had a significant positive impact on CBs" efficiency, while CAR had a significant positive effect on IBs".…”

Section: Efficiencymentioning

confidence: 83%

Islamic Banking Performance Measurement: A Conceptual Review of Two Decades

Rosmanidar¹,

Hadi

Ahsan

2021

ijibfr

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This article aims to provide an overview of the development of research on the measurement of Islamic banking performance over the past 20 years from 89 selected papers with Scopus-indexed journals ranked Q4 to Q1 or accredited with Sinta 2 to Sinta 1. This study used a qual-quantitative meta-analysis approach using the Mendeley citation application. The distribution of the topic and the depth of research in paper samples based on keywords in publications were analyzed using the VOSviewer application. The results of the analysis showed that the research trend of Islamic banking performance in reputable journals is increasing in recent years. Most of the studies performed in the last two decades have focused on the practice and corporate governance of Islamic banks and comparisons between Islamic and conventional banks based on financial performance ratios and aspect of maqasid al-Shariah; Only a few studies that discuss efficiency, social performance on Islamic banks, regulation, intellectual capital and stability of the financial performance of Islamic banks were found. The further discussion is an empirical exposure without theoretical exploration or analysis which is supposed to become the direction of banking research in the future. JEL Classification Codes: G21, L25, P17, P47.

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The determinant factors of efficiency on Islamic banking and conventional banking in Indonesia

Cited by 10 publications

References 14 publications

Board of directors and credit risk: An empirical study of Indonesian Islamic banks

Board of directors and credit risk: An empirical study of Indonesian Islamic banks

Stability of Islamic banks in Indonesia: Autoregressive Distributed Lag Approach

Islamic Banking Performance Measurement: A Conceptual Review of Two Decades

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