A Cross-Country Analysis of Islamic Bank’s Performance in Malaysia and Indonesia

Aims: To analyze and compare the effect of bank health on profitability in Islamic banks in Indonesia and Malaysia.
 Study design: The research method used is quantitative descriptive research.
 Place and Duration of Study: The sampling technique used was purposive sampling. The study was conducted on Sharia Banks registered with the Indonesian Financial Services Authority and Sharia Banks listed on the Malaysia Stock Exchange with a research period of four years, from 2016-2019.
 Methodology: The type of data obtained in this study is documentary data. The source of data used in this study is secondary data, namely data on audited financial statements of Islamic banks in Indonesia and Malaysia which were taken through the websites www.idx.co.id and www.bursamalaysia.com in 2016-2019. Data analysis was performed using multiple regression analysis using IBM SPSS to see the effect of the independent variables on the dependent variable, including the Descriptive Statistics Test and Multiple Regression Test.
 Results: The results of this study indicate that in Islamic banks in Indonesia and Islamic banks in Malaysia there is no difference in the results of testing the effect of NPF on ROA, namely NPF is not significant in affecting profitability as proxied by ROA. However, the results of testing the effect of OER on ROA are different in the two samples. In the sample of Islamic banks in Indonesia, OER has a significant effect on ROA. While OER is not significant in influencing ROA in the sample of Islamic banks in Malaysia. Testing the effect of CAR on ROA also shows results that are not different between the samples of Islamic banks in Indonesia and Islamic banks in Malaysia, namely CAR has a significant effect on ROA. In terms of soundness level analysis, Islamic banks in Malaysia tend to be superior in the perspective of Risk Profile (NPF) and Earnings (OER), where most Islamic banks in Malaysia get the title of Very Healthy compared to Islamic banks in Indonesia. While in the perspective of Capital (CAR), both samples get the same predicate, namely Very Healthy.
 Conclusion: The health level of Islamic banks in Malaysia is superior compared to the health level of Islamic bank in Indonesia.

This study aims to measure the productivity of Islamic banks in Indonesia and Malaysia using the Malmquist Productivity Index (MPI) method with the research period 2010-2019. The research objects used are 23 Islamic banks in Indonesia and Malaysia. The data of this study comes from the annual financial statements of each bank from the period 2010-2019. The input variables in this study are employee costs, administrative costs and third-party funds. And for the output variable is financing and operating income. The results of this study explain that during the period 2010-2019, the productivity level of Islamic banks in Indonesia and Malaysia has a fluctuating trend from year to year. Based on the average TFPCH score, it is concluded that the productivity of Islamic banks shows no increase in productivity or constant and technological change has not contributed optimally to the increase in productivity of Islamic banks in Indonesia and Malaysia. Furthermore, analyzing individually on Islamic Banks in Indonesia and Malaysia, it is found that there are 8 Islamic Banks with increased productivity, one Islamic bank in Malaysia and seven Islamic banks in Indonesia. The results also highlighted that the productivity level of Islamic banks in Indonesia is relatively better than Islamic banks in Malaysia. Then, the Malmquist Index quadrant analysis found that Islamic Banks in Indonesia and Malaysia dominate in quadrant 3 with a total of 12 Islamic Banks, followed by quadrant 4 with a total of 7 Islamic banks, and quadrant 1 with a total of 4 Islamic banks.

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This study measured and compared the efficiency of Islamic Bank in Malaysia and Indonesia. This sytudy used a quantitative non-parametric approach by using Data Envelopment Analysis (DEA)VRS assumption, and a statistic tool Mann-Whitney-U-Test. The samples were 6 Islamic Banks in Malaysia and 10 Islamic Bank in Indonesia that comply with the specified sample criteria during 2010-2014. The results of this research showed that Islamic Banks in Indonesia relatively higher than Islamic Bank in Malaysia based on VRS assumption. Source of inefficiency in Islamc banks in Indonesia more due to inefficiency on a scale. While the hypothesis test showed that there are no significant differences of efficiency between Islamic bank in Indonesia and Malaysia with VRS Assumtion .

This study measured and compared the efficiency of Islamic Bank in Malaysia and Indonesia. This sytudy used a quantitative non-parametric approach by using Data Envelopment Analysis (DEA)VRS assumption, and a statistic tool Mann-Whitney-U-Test. The samples were 6 Islamic Banks in Malaysia and 10 Islamic Bank in Indonesia that comply with the specified sample criteria during 2010-2014.The results of this research showed that Islamic Banks in Indonesia relatively higher than Islamic Bank in Malaysia based on VRS assumption. Source of inefficiency in Islamc banks in Indonesia more due to inefficiency on a scale. While the hypothesis test showed that there are no significant differences of efficiency between Islamic bank in Indonesia and Malaysia with VRS Assumtion .

This research aims to analyze and compare the performance of Islamic banks with the Islamicity Performance Index approach on Islamic banks in Indonesia and Malaysia. This type of research is a descriptive quantitative research. The sampling technique used is purposive sampling. The research was conducted on Islamic banks in Indonesia and Malaysia for 4 years, 2017-2020. This comparative research is expected to be an evaluation material for Indonesian Islamic banks to continue to improve their performance in order to catch up with Islamic banks in Malaysia. So the purpose of this research proposal is to analyze and compare the effect of the soundness of Islamic banks based on the Islamicity Performance Index on Islamic banks in Indonesia and Malaysia. The results of this study indicate that there are significant differences in the performance of Islamic banks based on the Equitable Distribution Ratio-Qardh in Islamic banks in Indonesia and Malaysia, while the performance of Islamic banks based on the Profit Sharing Ratio, Zakat Performing Ratio and Halal vs. Non-Halal Income Ratio, there is no significant differences in Islamic banks in Indonesia and Malaysia.

This study aims to determine the influence of company age, company size, third-party funds growth, and institutional ownership on the disclosure of sharia governance, measured using the content analysis method, in Islamic banks in Indonesia and Malaysia both partially and simultaneously. The population used in this study is Islamic banks in Indonesia and Malaysia during the 2019-2023 period. The sampling technique used is purposive sampling, resulting in 10 Islamic banks in Indonesia with 50 data points and 12 Islamic banks in Malaysia with 60 data points. This study employs a quantitative method with a panel data regression analysis model, using EViews 13 software. The results of this study found that, partially, the variable of company age has a significant positive effect on sharia governance disclosure, and the variable of company size has a significant negative effect on sharia governance disclosure in Islamic banks in Indonesia and Malaysia, while third-party funds growth and institutional ownership do not have a significant effect on sharia governance disclosure in Islamic banks in Indonesia and Malaysia. Simultaneously, the variables of company age, company size, third-party funds growth, and institutional ownership significantly influence the sharia governance disclosure of Islamic banks in Indonesia and Malaysia from 2019-2023.

The aim of this study was to analyze the influence of market concentration, market share, and OEOR on profitability in Islamic Banks in Indonesia and Malaysia in 2011 – 2015 using the paradigm of structure, conduct, and performance. The samples of the study consisted of a total 11 Islamic banks in Indonesia and 16 Islamic banks in Malaysia. The analysis technique use in this study was panel data regression using Eviews 7.0 programme. The independence variables of the study were market concentration ratio Herfindahl-Hirchman index), market share, and OEOR, while the dependent variable was the return of asset (ROA). The results of this study indicate that market concentration and market share variables not significantly affect the ROA of Islamic banks in Indonesia and Malaysia, while the OEOR variable has significant effect to the ROA of Islamic banks in Indonesia and Malaysia.

This study was conducted to analyze the soundness comparison of Islamic banks in Indonesia and Malaysia to measure the readiness of Islamic banks in both countries In facing of financial integration in the ASEAN Economic Community (AEC) by 2020. The study uses data of annual financial statements in 10 Islamic banks in each country in period 2012-2014 using CAMEL Method. The results of this study indicate that Islamic banks in Malaysia are relatively better prepared compared to Islamic banks in Indonesia. Islamic Banks in Malaysia tend to be more soundness than Islamic Banks in Indonesia during periods of 2012 to 2014. The implication based on finding indicated that the Islamic banks in Indonesia need improvement in the product diversification both on financing or funding to compete in ASEAN Region.DOI: 10.15408/etk.v17i1.6711

This study aims to examine the compliance of AAOIFI sharia accounting standards disclosures in Islamic Banks in Indonesia and Malaysia in 2017 and 2018. This study measures compliance by looking at three Islamic banks' products in Islamic, mudaraba, and musharaka. Data was collected from the annual report of 12 Islamic commercial banks in Indonesia and 15 Islamic commercial banks in Malaysia for 2017 and 2018. The data collection method in this study is the documentation study. Analysis of the data used is descriptive statistics. This study found that the disclosure of Islamic banks related to murabahah, mudharabah and musyarakah is still relatively low. There was no difference in compliance levels between the two countries during the periods of 2107 and 2018. Among the three Islamic bank products, murabaha has the highest mean. In addition, Islamic banks in Indonesia as a whole have a higher level of disclosure than Islamic banks in Malaysia.

This study aims at comparing the level of disclosure of Islamic values in Islamic banks in Indonesia and Malaysia. The method used in research is a quantitative method using descriptive analysis techniques and test of difference. The data used in this study are secondary data, namely the annual reports of Islamic banks in Indonesia and Malaysia in 2013-2017. The disclosure aspects of Islamic values in the annual report of Islamic banks that became the focus of this study are information regarding the vision and mission, the top management information, service and product information, zakat, donation and charity, employee support, commitment to debtors, commitment to the environment and society, and evaluation of the Sharia Supervisory Board (DPS). The result of this study indicates that there are differences in the level of disclosure of Islamic values in Islamic banks in Indonesia and Malaysia. Based on the results of statistical tests show that the average disclosure of Islamic values in Islamic banks in Indonesia is better than Islamic banks in Malaysia. The difference in the level of disclosure is due to the status of several Islamic banks in Indonesia as publicly owned companies.Keywords: Disclosure of Islamic Values, Annual Report, Islamic Bank.

This study aimed to compare the social performance between Islamic banking in Indonesia and Malaysia were measured by using a model of Islamic Social Reporting Index (ISR) and the Global Reporting Initiative Index (GRI). The objects of this study were drawn from four Islamic banks in Indonesia and three Islamic banks in Malaysia that meet certain criteria, namely; Islamic banking report annual report for 2010 and report the social responsibility disclosure. This study was used content analysis approach. The results showed that the overall average social performance of Islamic banking in Malaysia higher than social performance of Islamic banking in Indonesia. However, when tested statistically, the difference did not show significant value. Moreover, there are no Islamic banking in Indonesia and Malaysia reached a perfect level of social performance (100%) of the ISR and the GRI index.

<p>The purpose of this research is to examine the difference of Islamic Social Reporting (ISR) disclosure level of islamic banking in Indonesia and Malaysia based on ISR index. The samples were selected by purposive sampling method. The samples that is used in this research is five islamic banks in Indonesia and five islamic banks in Malaysia. This research uses secondary data, that is annual report from 2010-2012. Annual reports were analyzed using content analysis method. Furthermore, the differences of ISR disclosure level were tested using independent sample t-test. The results showed that ISR disclosure level of islamic banking in Indonesia is better than ISR disclosure level of islamic banking in Malaysia. Based on the results of hypothesis testing, found that there are significant differences in the disclosure level between islamic banking in Indonesia and Malaysia.</p><p><br />Keywords: Islamic Social Reporting, Islamic Social Reporting Index, Islamic Banking</p>

The purpose of this research is to examine the difference of Islamic Social Reporting (ISR) disclosure level of islamic banking in Indonesia and Malaysia based on ISR index. The samples were selected by purposive sampling method. The samples that is used in this research is five islamic banks in Indonesia and five islamic banks in Malaysia. This research uses secondary data, that is annual report from 2010-2012. Annual reports were analyzed using content analysis method. Furthermore, the differences of ISR disclosure level were tested using independent sample t-test. The results showed that ISR disclosure level of islamic banking in Indonesia is better than ISR disclosure level of islamic banking in Malaysia. Basedon the results of hypothesis testing, found that there are significant differences in the disclosure level between islamic banking in Indonesia and Malaysia.

Performance measurement is vital to examine the performance of any institution. Due to the different nature of business operations, processes, and activities in Islamic banks, they have to be measured by a more focused instrument to reflect the Shariah compliance parts and their business nature compared to the conventional banks. Hence, M Score which has been developed by Abdul Rahim, Abdul Rahman and Syed AlHabshi (2016) has been adopted in this study. The findings from the computation will indicate which country gains the higher M Score in performance, and this can be used as a benchmarking exercise. This research aims to analyse and compare the M Score performance of Islamic banks in Malaysia and Indonesia. The content analysis via Annual Reports of Islamic banks has been used for this study. The sampling technique used is purposive sampling. The research was conducted on Islamic banks in Malaysia and Indonesia over a period of two years, from 2020-2021. This comparative research is expected to be an evaluation tool for Malaysian Islamic banks, helping them improve their performance to catch up with their counterparts in Indonesia. Thus, the purpose of this research proposal is to analyse and compare the effect of the soundness of Islamic banks based on the M Score performance of Islamic banks in Malaysia and Indonesia. The results of this study indicate that Islamic banks in Indonesia have a higher M Score ranking than those in Malaysia. There are significant differences in the performance of Islamic banks based on the Need Fulfilment and Equitable Distribution (NFED), Economic Growth (EG), and Economic Stability (ES) in Malaysia and Indonesia.