of  

or
Sign in to continue reading...

Analysis Comparative of The Financial Performance of Islamic Banks And Conventional Banks For The 2011-2016 Period

Egy Juniardi
By Egy Juniardi
4 years ago
Analysis Comparative of The Financial Performance of Islamic Banks And Conventional Banks For The 2011-2016 Period

Islamic banking


Create FREE account or Login to add your comment
Comments (0)


Transcription

  1. Advances in Economics , Business and Management Research, volume 64 2nd Padang International Conference on Education, Economics, Business and Accounting (PICEEBA-2 2018) Analysis Comparative of The Financial Performance of Islamic Banks And Conventional Banks For The 2011-2016 Period. Egy Juniardi 1) Enni Sari Siregar 2) Farida Aini 3) Djaya Putra Gani 4) 1Universitas Negeri Padang, Padang, Indonesia, gyejuniard@gmail.com Universitas Negeri Padang, Padang, Indonesia , ennisari056@gmail.com Universitas Negeri Padang, Padang, Indonesia, faridaaini8899@gmail.com Universitas Negeri Padang, Padang, Indonesia, , djapoet@gmail.com Abstract The aim of this research is to find out whether there are significant differences regarding the performance of Sharia banking and conventional banking as a whole in Indonesia in the period 2011-2016. This research is an exploratory research with quantitative methods. The sampling technique is done by using purposive sampling method with the number of samples is 8 banks, 4 banks for Islamic banks (PT. Bank Syariah Mandiri, Bank BTN Syariah, Bank BNI Syariah and BRI Sharia), and 4 banks for Conventional banks (Bank Mandiri, Bank BTN, Bank BNI and BRI Bank). This study uses a different test with the SPSS version 22.00 program. The results showed that Islamic banking has a better LDR compared to conventional banks' LDR, conventional banks have better CAR compared to Islamic banks CAR, conventional banks have better ROA compared to ROA of Islamic banks, conventional banks have better ROE compared to ROE Islamic Banks, conventional banks have better BOPO compared to BOPO Islamic Banks. Keywords: Loan to Deposit Ratio (LDR), Capital Adequacy Ratio (CAR), Return On Asset (ROA), Return On Equity (ROE), Operating Expense to Operating Income (BOPO) Introduction The Islamic banking system and conventional banking synergistically support the mobilization of funds from the wider public to increase financing capacity for national economic sectors. Islamic banks in Indonesia in a relatively short span of time, have shown significant progress and increasingly show their existence in the national economic system. In recent years several conventional banking companies have established sharia-based banks, meaning that more Islamic banks show very high public trust in Islamic banking. The fundamental thing that distinguishes between conventional financial institutions and sharia is that it rests on the return and distribution of benefits provided by the customer to the institution and / or provided by the institution to the customer. Sharia bank operational activities use profit and loss sharing principles. Islamic banks do not use interest as a tool to earn income or charge interest on the use of funds and loans because interest is usury which is forbidden. In some cases, both conventional banks and Islamic banks have similarities, especially in the technical side of receiving money, transfers, conditions for obtaining financing and others. However, there is a fundamental difference between the two, namely in the Islamic bank the contract that is carried out has worldly and consequent consequences because the contract is carried out based on Islamic law. The basic characteristics of Islamic banking which, among other things, prohibit the application of usury and prohibit transactions based on speculation motives, making Islamic banks identified as financing institutions that are closely related to the real sector and this is a competitive advantage for Islamic banks. Islamic bank operations that use the principle of profit sharing is not a solution for the negative spread outbreaks experienced by conventional banks, because the consequences of the interest system set by conventional banks make banks have to bear the loss of fund raising business activities when credit interest rates are lower compared to deposit rates (third party funds that are deviated in the bank). As Copyright © 2019, the Authors. Published by Atlantis Press. This is an open access article under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/). 605
  2. Advances in Economics, Business and Management Research, volume 64 one of the financial institutions, banks need to maintain their performance so that they can operate optimally. Because Islamic banks must compete with conventional banks that have developed rapidly in Indonesia. This increasingly sharp competition must be accompanied by good management to survive in the banking industry. One of the factors that must be considered by banks to survive is the bank's financial performance. At present there are quite a number of conventional banks that have established or opened sharia branches. For example, Bank Mandiri is now opening Bank Syariah Mandiri as a bank that runs its business with sharia principles. In addition, other banks such as BNI, BRI and Bank Mega also opened Islamic banks with the names BNI Syariah, BRI Syariah and Mega Syariah Bank. This is a question for the writer about the background of the opening of Islamic banks by conventional banks, is this because the financial performance of Islamic banks is better than conventional banks or there are other things that are considered by conventional banks. Methods Population and Sample The population in this study are Islamic Banks and Conventional Banks which each conventional bank has Islamic banking during the period 2011-2016 and in determining the sample, the researcher uses Purposive sampling, that is the sample is drawn based on the characteristics of the population previously known. Thus, those considered to meet the criteria to be sampled were 8 banks, 4 banks for Islamic banks (PT. Bank Syariah Mandiri, Bank BTN Syariah, Bank BNI Syariah and BRI Syariah), and 4 banks for Conventional banks (Bank Mandiri, Bank BTN, Bank BNI and BRI Bank). Definition Of Operational Variables Loan to Deposit Ratio (LDR), The main activity of bank is using the funds (deposits) effectively by the way of lending (financing). In general the loan-deposit ratio is measures bank’s liquidity as well as profitability of the bank. The ratio is calculated by dividing the total amount of loans, by total amount of deposits. The resulting figure is expressed as a percentage. The Loan- Deposit Ratio is defined by the following formula: