Efficiency is an important indicator to observe the banks’ ability in resisting and facing the tight rivalry at banking industry. The study aims to evaluate the efficiency and to analyze the determinants of efficiency of Islamic bank in Indonesia on 2010 – 2013 with Two-Stage Data Envelopment Analysis approach. The objects of the study are 11 Islamic banks (BUS). The first phase of testing uses the Data Envelopment Analysis (DEA) method showed that the efficiency of Islamic bank is inefficient on managing the resources and small Islamic banks are more efficient than the larger. The second phase of testing uses Tobit model showed that Capital Adequacy Ratio (CAR), Return on Asset (ROA), Non Performing Financing (NPF), Financing to Deposit Ratio (FDR), and Net Interest Margin (NIM) have positive significant effect on the efficiency of Islamic banks, while Good Corporate Governance (GCG) has a negative significant effect. Moreover, the macroeconomic variables, such as GDP growth and inflation have no significant effect on efficiency of Islamic banks. It suggests that to realize the optimum level of Islamic banks’ efficiency is only related with bank-specific, while the volatility of macroeconomics condition contributes nothing

The study aims to analyse the spin-off policies’ impact on the Islamic banks’ efficiency in Indonesia. The study was conducted on five spin-off Islamic banks and efficiency were measured by the BOPO ratio. The research variables used were dummy spin-off, ROA, FDR, and economic growth. Data analysis used panel data regression on annual data from 2008 to 2018. The results suggest that, first, the implementation of spin-off policy significantly increased the operational efficiency of Islamic banking. Second, ROA also has a negative effect on efficiency. Third, FDR and economic growth have no significant effect on the Islamic banks’ efficiency in Indonesia.

Islamic banking Act in Indonesia requires to manage the financial funds and social funds simultaneously. In the case of spin-off Islamic Banks, the fund manager is separate from the parent company, including in managing social funds, e.g. zakah, infaq, and sadaqah. This study is going to investigate the spin-off's impact on the social funds' productivity in spin-off Islamic Banks. The method used in this paper is the Malmquist Productivity Index (MPI) test for annual data from the period 2005 to 2017. The samples used is two spin-off Islamic banks as the rest are established with conversion or acquisition models. The results show that productivity changes increased after the spin-off decision and was influenced by technological changes. However, the spin-off decision hasn't a significant impact on social funds' productivity in Islamic banks. It implies that independence in managing resources supports the Islamic banks' performance, especially for social funds.

<p><em>The research aimed to analyze the stability of Islamic banking industry and its determinants in Indonesia. The same analysis was also done to the conventional banking industry as Indonesia practices dual banking systems. Using monthly data on Indonesian Banking Statistics for 2008-2013, this research implemented the Banking Stability Index (BSI) model for predicting the bank's stability. The analysis began with measuring BSI then using VECM to examine the effect of variables on BSI. </em><em>The result showed that the BSI of both banking system was exhibiting the moderate level of stability though Islamic banking is </em><em>more stable and safe way of financing</em><em> than conventional banking. The shocks of inflation, exchange rate, efficiency, income diversity, liquidity, and Industrial Production Index responded positively by Islamic Bank' stability, while interest rate and market share responded negatively. In another hand, conventional bank' stability responded positively the shock of the exchange rate, income diversity, interest rate, liquidity, and market share, while other variables responded negatively. The results of shocking variables strongly indicated that the conventional banking is more vulnerable than Islamic banking. Islamic banking looked tend to the shock resistance and less volatile. This conclusion, however, might be still questioned as the BSI was not designed specifically for Islamic banking. </em><em>Therefore, constructing an Islamic BSI (under Islamic banking characters) was important to measure the banking stability more appropriate and to develop a proper early warning system for Islamic banking industry.</em></p>

Since 2008, Indonesia has had a particular policy for Islamic windows to spin off into full-fledged Islamic banks separate from their conventional parent if they meet the criteria. In the case of Bank Aceh Syariah, since Q3 2016, the spin-off has been done through a conversion mechanism from Bank Aceh to Bank Aceh Syariah. The study aims to analyze the effectiveness of conversion decisions in Bank Aceh Syariah. Non-parametric test with the Wilcoxon signed-rank is used to analyze the banking performance due to the conversion. The performance indicators tested in the study are capital adequacy, liquidity risk, profitability, and management efficiency over Q2 2014 until Q3 2018. The results suggest that the conversion decision of Bank Aceh Syariah is effective in correcting the non-performing financing (NPF) ratio but declining the level of profitability through ROA, ROE, and NOM ratio. Thus, the spin-off decision through the conversion mechanism needs to forecast the future financial performance and the effort to fulfill sharia compliance.Abstrak: Sejak 2008, Indonesia memiliki kebijakan khusus bagi perbankan syariah yang mewajibkan UUS untuk melakukan spin-off menjadi BUS yang terpisah dari bank konvensional induknya jika telah memenuhi kriteria. Pada kasus Bank Aceh Syariah, sejak kuartal III 2016 telah dilakukan spin-off melalui mekanisme konversi dari Bank Aceh menjadi Bank Aceh Syariah. Tujuan penelitian ini adalah untuk menganalisis efektivitas keputusan konversi Bank Aceh Syariah. Pengujian non parametrik dengan uji Wilcoxon digunakan untuk menganalisis kinerja keuangan akibat konversi. Indikator kinerja yang diuji dalam studi ini adalah permodalan, risiko likuiditas, profitabilitas, dan efisiensi manajemen pada periode Q2 2014 hingga Q3 2018. Hasil penelitian ini menunjukkan bahwa keputusan konversi Bank Aceh Syariah efektif dalam memperbaiki rasio pembiayaan bermasalah (NPF), namun menurunkan tingkat profitabilitas melalui ROA, ROE, dan NOM. Dengan demikian, keputusan spin-off melalui konversi perlu mempertimbangkan capaian kinerja keuangan di masa mendatang, selain sebagai upaya pemenuhan kepatuhan terhadap syariah.