The Performance of Islamic Banks and Macroeconomic Conditions

Sanwari, Suria Rismawati; Zakaria, Roza Hazli

doi:10.12816/0002770

Cited by 15 publications

(19 citation statements)

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“…In the previous studies, Drake, Hall and Simper (2005) asserted that macroeconomic factors are the most influential one toward banking efficiency in Hongkong. In line with their findings, Masood, Ashraf (2012), Karim, Al-Habshi, Abduh, (2016), Sanwari and Zakaria (2013) also revealed that macroeconomic factors, such as GDP growth, had significant impact on banking profitability. In order to see how far the impact of macroeconomic factors, this research uses multiple regression test with estimation methods as follow:…”

Section: The Impact Of Macroeconomic Factors On Efficiencysupporting

confidence: 63%

Effects of Macroeconomics Factors toward Efficiency in Banking

Fakhrunnas

Nahar

Albana

2018

jejak

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The main objective of this study is to analyze the effect of macroeconomic factors toward efficiency in Islamic and Conventional Banking. Banking as one of components in financial system that highly contributes to the growth and development of the economy in a country, especially after establishment of the first Islamic bank in Indonesia at the year of 1992. Afterwards, Islamic banking began to develop and start to compete with conventional banking. Hence, in order to survive and do fair competitiveness, Islamic and Conventional banking have to maintain its efficiency. This study uses the methodology of Data Envelopment Analysis (DEA). This study also analyze the macroeconomics factors namely inflation, interest rate of Bank indonesia and the growth of Gross Domestic Product (GDP) which affects the bank efficiency. Our data is obtained from annual financial statement published by each islamic and conventional bank and Bank Indonesia starting from 2007 to 2016. This study shows that conventional banks have higher efficiency than Islamic banks, while crisis in 2008 had no significant effect on the efficiency of Islamic and conventional banking. However, a decrease in the level of efficiency that occurs in conventional banking indicates that conventional banking is more sensitive to the crisis.

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Section: The Impact Of Macroeconomic Factors On Efficiencysupporting

confidence: 63%

Effects of Macroeconomics Factors toward Efficiency in Banking

Fakhrunnas

Nahar

Albana

2018

jejak

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“…Abduh and Alias (2014) found that CAR had a positive effect on Islamic bank performance. Milhem and Istaiteyeh (2015) and Sanwari and Zakaria (2013) also found that a positive effect exists between capital and bank performance.…”

Section: Capital Risk and Performancementioning

confidence: 92%

“…This is because the profits of an Islamic bank depends on the amount of financing given. Milhem and Istaiteyeh (2015) and Sanwari and Zakaria (2013) found that LDR hada significant effect on bank performance. In addition, Mahmud et al (2016) and Harjanti et al (2016) found that LDR had an insignificant effect on bank performance.…”

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confidence: 98%

Maqasid Sharia Index, Banking Risk and Performance Cases in Indonesian Islamic Banks

Sutrisno

Widarjono

2018

Asian Economic and Financial Review

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In the operation, Islamic banking is assessed not only based on the banking risk management but also based on the maqasid sharia. The purpose of the study is to examine the influence of Maqasid Sharia and banking risk on Islamic bank performance. The performance of Islamic banks is measured by the return on assets (ROA), Maqasid Sharia proxied by Maqasid Sharia Index (MI), musharaka financing (MUS) and mudharaba financing (MUD), while banking risk is measured by Capital Adequacy Ratio (CAR), financing to deposit ratio (FDR), non-performing financing (NPF), and operating expense to operating income ratio (OEI). The population in this study is all of the Islamic commercial banks that operate in Indonesia, and there are as many as 13 of them. As the population is a little realistic, all of the population is taken as samples. The results show that the MI did not significantly affect the performance of Islamic banks, while MUS had a significant and positive impact on ROA and MUD had a significant but negative impact on ROA. NPF and OEI had a significant and negative effect on performance, but CAR and FDR had no significant effect on the performance of Islamic banks. Contribution/ Originality:This study contributes to the measurement of sharia bank health using the maqasid sharia approach, which is to determine the effect of sharia maqasid implementation and risk on the performance of Islamic banks. The research is based on a lack of studies on the implementation of maqasid sharia related to bank performance INTRODUCTIONIt has been almost three decades since Islamic banks in Indonesia started to operate and it is still an interesting area to conduct research into. Besides being expected to make a profit, the management of Islamic banks is also required to base their operations on the Shariah goal or Maqasid Sharia (Antonio et al., 2012). Mohammed and Razak (2008) have measured Islamic bank performance in the framework of Maqasid Sharia, which includes aspects of education and research, as well as aspects of justice and maslahah. Hartono and Sobari (2017) have also measured the performance of Islamic banks by using the Maqasid Sharia Index (MSI). The implementation of Islamic bank performance measurement in Indonesia, based on Maqasid Sharia, is still low. It even has an inverse relationship with the banks' performance based on CAMELS and the performance of Maqasid Sharia (Sutrisno and Widarjono, 2017). While Kuppusamy et al. (2010) measures the performance of sharia banks using sharia conformity.

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“…Previous research (Iriani and Yuliadi, 2015) has said that the behavior of banking and economic behavior has been affecting NPF in sharia banking in Indonesia. Research in Malaysia (Sanwari and Zakaria, 2013) says that the performance of banks is strongly influenced by capital, asset quality, while macro-economic variables do not affect the financial performance of sharia banks although not all. In addition Asy'ari (2006) says that third party funds and lending rates influence the financing of sharia business.…”

Section: Introductionmentioning

confidence: 99%

What is the Determinant of Non-Performing Financing in Branch Sharia Regional Bank in Indonesia

Damanhur

Albra

Syamni

et al. 2018

Proceedings of MICoMS 2017

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Purpose-The aim of this study is to analyze the effects of macro-and micro-economic variables on the ratio of troubled financing (Non-Performing Financing, NPF). Design/Methodology/Approach-The method used in this research is the data panel fixed effect with 13 banks and 4 periods of data report (semi-annual report 2014-2015). Findings-The regression result achieved that variable inflation significantly influences the ratio of NPF. Variable Gross Domestic Product and assets total significantly influence the ratio of NPF too. While the SBI sharia's variable and Financing to Deposit Ratio did not significantly affect NPF in Syariah's Unit of Aceh Bank Pembangunan Daerah (BPD) in Indonesia. Research Limitations/Implications-This study uses panel data which are a combination of time series data and cross-section. Practical Implications-The policymakers can design a macro-policy carefully and better fiscal policies.

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The Performance of Islamic Banks and Macroeconomic Conditions

Cited by 15 publications

References 0 publications

Effects of Macroeconomics Factors toward Efficiency in Banking

Effects of Macroeconomics Factors toward Efficiency in Banking

Maqasid Sharia Index, Banking Risk and Performance Cases in Indonesian Islamic Banks

What is the Determinant of Non-Performing Financing in Branch Sharia Regional Bank in Indonesia

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