Abstract
This research aimed at identifying whether Bank Umum Syariah (BUS), as the result of spin-off of Unit Usaha Syariah (UUS), has better performance compared to the period when they were still in the form of UUS. There are 4 out of 5 BUSes as a result of spin-off us as samples. The results indicate that: 1) the spin-off of UUS to become BUS has successfully increased the market share of each BUS; 2) there is no significant difference in the profitability before and after spin-off in most sample; 3) no significant difference related to the operational efficiency.
Highlights
The law of the Republic of Indonesia No 21 Year 2008 regarding Sharia Banking (2008) requires Bank Umum Konvensional (BUK) or Conventional Commercial Banks to spin-off their Sharia Business Units (UUS) no later than 2023
This means that there are still eight more years for Conventional Commercial Banks (BUK) that have UUS to spin off the UUS to become Sharia Conventional Bank (BUS), provided that the asset of the UUS has reached 50% of the value of its holding bank
Variables in this research are several bank financial ratios that represent the performance of sharia bank, namely the ratio of market share, profitability ratio represented by 3 ratios namely Return on Asset (ROA) Ratio, Net Profit Margin (NPM) ratio, and ratio of Total Asset Turnover, as well as the efficiency ratio in carrying out business represented by Cost to Income Ratio (CIR)
Summary
The law of the Republic of Indonesia No 21 Year 2008 regarding Sharia Banking (2008) requires Bank Umum Konvensional (BUK) or Conventional Commercial Banks to spin-off their Sharia Business Units (UUS) no later than 2023. In this matter, the government would like to assert that the form of UUS in the banking industry is only temporary in nature. Seven years has passed since the issuance of the regulation on mandatory spin-off of Sharia Business Units (UUS). The strongest reason for some BUKs to choose this form is the easy process for setting up a UUS both from the aspect of capital and time required
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