Abstract
Islamic bank in Indonesia in the last ten years shows a positive trend is quite impressive, the average asset growth of 30% is well above the average growth of conventional banks which only reached 15%. The other side, if the terms of its contribution to the national banking system is still very small, as indicated by the achievement of market share of Islamic banks until the end of December 2016 reached only 5.30% of the total national banking assets. Regarding to the objective conditions, would need the appropriate business development strategy to boost growth and expand market share, so that Islamic banks can increase their role in national economic activities. Spin-Off sharia business unit owned by a conventional bank is one of the business development strategy offered by the Banking Act. This paper aims to identify and measure the effectiveness of the implementation of the spin-off business unit into a sharia/Islamic banks (Sharia Commercial Bank-SCB) that have been carried out by some Islamic banks in Indonesia. The results show that the growth rate of SCB business activity is better than Sharia Business Unit (SBU), but in terms of profitability and efficiency level of SBU is better than SCB.
Highlights
The beginning of the birth of sharia banking in Indonesia was marked by the birth of Bank Muamalat Indonesia (BMI) in 1992, as a commercial bank based on Islamic sharia (Al-Qur'an and Al-Hadith)
His birth can not be separated from the initiative, determination and struggle of the scholars who are collected in the Indonesian Ulama Council (MUI) who want the establishment of Islamic banks in Indonesia, which the majority Muslim community
For approximately 7 years, practically BMI was the only commercial bank conducting business based on sharia principles, in the midst of competition with conventional commercial banks amounting to 238 banks with 7,661 offices at the end of December 1998 with total assets reached Rp 895.5 trillion
Summary
The beginning of the birth of sharia banking in Indonesia was marked by the birth of Bank Muamalat Indonesia (BMI) in 1992, as a commercial bank based on Islamic sharia (Al-Qur'an and Al-Hadith). For approximately 7 years, practically BMI was the only commercial bank conducting business based on sharia principles, in the midst of competition with conventional commercial banks amounting to 238 banks with 7,661 offices at the end of December 1998 with total assets reached Rp 895.5 trillion (compared with total assets of sharia banks of Rp 400 billion) This shows that the development of sharia banks in Indonesia is not as expected. While Cristensen (2001), states that the business model as a source of all competitive advantage owned by an organization that differentiates it with the company's positioning of products in the same industry Another notion of Chesborough in Zott and Amit (2009) defines the business model as an activity-based chain structure, creating value by defining a series of activities ranging from raw materials to raw materials to final customers, at where a predetermined value is added to the overall activity. Statistics published by Bank Indonesia (BI) and Financial Services Authority (OJK), as well as the financial statements of Islamic banks
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