Islamic Banking Assets Research Articles

Analysis of the Influence of Mobile Banking on the Profitability Level of Sharia Banks in Indonesia in 2019-2023

The aim of this research is to determine the effect of mobile banking on the level of Return On Assets (ROA) of Islamic banks in Indonesia in 2019-2023. The rise and fall of ROA is caused by unstable profits and total assets. This research uses quantitative research, and the data source uses secondary data in the form of a time series of 20 samples. Data analysis techniques use descriptive statistical test techniques, normality test, hypothesis test (t test), coefficient of determination test (R Square), and simple linear regression analysis. Data processing uses the SPSS Version 23 program. The research results show that the mobile banking variable has a partial effect on the profitability of Islamic banks in Indonesia in 2019-2023. This can be proven by the results of the t test analysis showing that the e-banking variable has t count gt; t table, thus e-banking has an effect on the profitability of Islamic banks in Indonesia in 2019-2023.Keywords: Mobile Banking, Profitability

Determinan Pertumbuhan Total Aset Bank Umum Syariah Di Indonesia

The study aims to analyze the effect of Non-Performing Finance, Financing Depocit Ratio, Operating Cost of Operating Income and Inflation on the growth of Total Assets of Islamic Commercial Banks in Indonesia. This type of research is quantitative research. The data used in this study is data that has been combined for all Islamic Commercial Banks from 2018-2022. The data collection technique uses documentation sourced from Islamic banking statistical reports on the OJK website and the BI website. Data analysis techniques using multiple linear regression. The results showed that the Financing Depocit Ratio and Operating Cost of Operating Income partially influenced the Growth of Total Assets of Islamic Commercial Banks in Indonesia. While Non-Performing Finance and Inflation partially have no effect on the Growth of Total Assets of Islamic Commercial Banks in Indonesia. Simultaneously there is an influence of NPF, FDR, BOPO and Inflation on the Growth of Total Assets of BUS in Indonesia. The contribution of independent variables to the growth of Total Assets is 84%.

Unconventional banking and poverty reduction: A regression analysis with policy recommendations for Hail

The present study addresses a significant omission in the literature by examining the role of non-traditional financial organizations in poverty reduction. Previous research has primarily focused on the direct impact of commercial banks on poverty, neglecting the contribution of other types of financial institutions. This research posited that Islamic banks are anticipated to assume a pivotal function in mitigating poverty; nonetheless, more studies on the topic need to be conducted. This research used the pooled panel regression technique to investigate the impact of Islamic banks on poverty alleviation in several developing nations from 2013 to 2019. The empirical data demonstrates a direct correlation between the overall assets of Islamic banks and some evident characteristics. The heightened acquisition of holdings by Islamic banks indicates a decrease in poverty. Furthermore, a statistically significant correlation exists between the legal framework and poverty alleviation. It is crucial to acknowledge that the research is limited by the intrinsic limits imposed by the accessible information on Islamic banks and the specific temporal limitations of the study. Future academic research should aim to increase the sample size and cultural and social factors and expand the time frame to understand the intricate function of Islamic banks in reducing poverty entirely. This paper is helpful to many policymakers in developing countries, including Hail development plans in Saudi Arabia.

Sand or grease effect? The impact of Islamic banking on the social mission of microfinance institutions

PurposeIslamic banking and microfinance institutions (MFIs) share the core objective of serving the underprivileged. This study aims to investigate whether Islamic banking development facilitates (greases) or hinders (sands) the social mission of MFIs.Design/methodology/approachData for 19 countries covering the period 2010–2018 were collected from the World Bank, Bank Focus and International Monetary Funds and analyzed using conventional econometric methods. Endogeneity-corrected techniques and alternative proxies were employed to ensure robust results.FindingsThe study revealed that Islamic banking development (proxied by the size of the Islamic banking assets) weakens the depth of outreach of MFIs (measured by average loan size). In countries with growing Islamic banking, MFIs appear to shift their focus toward wealthier clients, potentially due to market saturation among the poor. This is evidenced by MFIs offering larger loans, suggesting a mission drift toward profit maximization. Therefore, it can be inferred that competition from Islamic banks, to some extent, erodes the social mission of MFIs.Originality/valueThis study is among the few to examine the recent and comprehensive relationship between Islamic banking development and the social mission of MFIs.

Beyond-money framing and customer decision to patronise Islamic banking: an experimental study

PurposeThe recent growth of Islamic bank (IB) assets in Indonesia has been mainly driven by government interventions rather than the organic development on the demand side. A novel approach to attract new consumers, increase market share and accelerate its development is the need of the hour. This study aims to propose beyond-money framing that promotes the Shari’ah and social dimensions of IB’s products on top of its contemporary marketing strategy. This paper examines whether this technique can advance IBs selection.Design/methodology/approachThis paper uses the (online) laboratory experiment involving 192 high- and low-literate participants from Generation Z (Gen Z). Using difference tests and Logit regression, this paper examines the impact of beyond-money framing on customers decision-making.FindingsBeyond-money framing has a significant impact in influencing customers decisions to select profit-and-loss sharing (PLS) products offered by IBs. The effect of the framing accelerates in the high-literate customers.Research limitations/implicationsThe contract examined is only the PLS one (mudharabah). Respondents are also restricted to Gen Z. This study does not separate the effect of Shari’ah and social aspects from beyond money framing.Practical implicationsTo attract new customers, IBs should emphasise their products’ social and Shari’ah features rather than relying solely on a low-price strategy.Originality/valueTo the best of the authors’ knowledge, this paper is the first study proposing the framing strategy for IBs and examining its impact on IB’s product acceptance in Indonesia.

Analysis of Internal and External Factors On Asset Growth at PT. BPRS Aceh Province

Currently, the development of BPRS from year to year has increased. This increase can be seen through the BPRS total asset report. Many factors influence the growth of total assets of Islamic banks, including internal and external factors. This research aims to determine the effect of inflation, DPK and NPF on the growth of Total Assets in BPRS Aceh Province. The method used in this research is a quantitative method. The sampling technique used was purposive sampling, so that 11 companies were obtained as samples. The data used in this research is panel data. The data in this research comes from financial reports obtained from BPRS Banks in Aceh Province. The data analysis technique uses multiple linear regression analysis, previously carried out a classical assumption test. The results of the F test show that inflation, DPK and NPF together (simultaneously) have an effect on total assets at PT Bank BPRS. The results of the t test show that inflation partially influences total assets at PT Bank BPRS, DPK partially influences total assets at PT Bank BPRS, NPF partially influences total assets at PT Bank BPRS.

STATE AND PROSPECTS FOR THE DEVELOPMENT OF ISLAMIC FINANCE INSTRUMENTS (SUKUK) IN RUSSIA AND ABROAD

The search for new sources of financing investment projects in modern Russia in the context of external sanctions and the implementation of geopolitical threats actualizes the problem of incorporating Islamic finance instruments into the structure of the financial market. The early twentieth century development experience of a number of foreign countries shows the steady growth of the assets of Islamic banks, investment funds and the volume of issuance of investment certificates (sukuk), which constitute the main segments of Islamic finance in the world. Islamic financial assets are widely represented in the Gulf countries, Southeast Asia, the Middle East and South Asia, and Africa. The implementation of the principles of Islamic finance in the Russian Federation is hampered by legal, cultural, historical and political factors. While there are certain Islamic financial products in Russia, there is no issue of sukuk at all. In this regard, the purpose of this paper is to study the principles of Islamic finance and the functioning mechanism of the market for the investment certificates (sukuk), possibilities and limitations of their implementation in the modern Russian economy. The author defines sukuk as an Islamic financial instrument used for securitization of assets, and identifies its differences from traditional bonds. Alternative approaches to solving the problem of compliance of sukuk with Sharia principles are analyzed. The prerequisites for realizing the potential of sukuk in modern Russia are determined and the obstacles to their issuance are formulated. It is concluded that the adoption of the Federal Law of 04.08.2023 N 417-FZ "On Conducting an Experiment to Establish Special Regulation in Order to Create the Necessary Conditions for Carrying out Partnership Financing Activities in Certain Constituent Entities of the Russian Federation and on Introducing Amendments to Certain Legislative Acts of the Russian Federation" and its implementation, taking into account its provisions of pilot projects in a number of Russian regions, will make it possible to intensify the process of incorporation of project financing instruments into the structure of the financial markets of modern Russia.

THE INFLUENCE OF SHARIA BANK ASSETS ON POVERTY LEVELS IN INDONESIA FOR THE 2015-2022 PERIOD

Poverty is one of the main problems in Indonesia. On the other side, strengthening the financial sector is one of the solutions for poverty alleviation, especially in the banking sector. This research was conducted to see the effect of Islamic bank assets on poverty. For this reason, this study used a quantitative method with simple linear regression to analyze data. The data used is secondary data, the data on Islamic bank assets, and the data on poverty rates in Indonesia for the 2015-2022 period. The results of the regression test show that the growth of Islamic bank assets has a negative but not significant effect on poverty with a coefficient of 0.000935

The impact of economic uncertainty on bank efficiency—the moderating role of country governance

This study examined the impact of economic uncertainty (EU) on Islamic banks (IBs) and conventional banks' (CBs) efficiency in countries that meet a standard where 1% share of Islamic banking assets is part of their total domestic banking sector assets. In addition, this study explored the moderating effect of country governance (CG) by employing the quantitative methodology based on secondary data from 2006 to 2021. The data analysis was done through ordinary least square, fixed effect model, and the random effect model. EU was found to enhance bank efficiency based on the basic regression results. CG moderated the positive effect of EU on bank efficiency. Additional robustness tests showed that EU was positively related to both types of banks' efficiency. The value of the paper is unique in that few papers have investigated the moderating effect of CG on the impact of EU on banks' efficiency, which enhances comprehension of EU and CG. These results highlight important policy implications whereby banks should continue to invest in and improve their risk management strategies. In addition, governments and regulatory bodies should prioritise good governance practices as these can improve banks’ efficiency.

Manajemen Aset dan Liabilitas dalam Bank Syariah: Analisis Komprehensif Institusi Keuangan Berprinsip Syariah

The Islamic banking industry in Indonesia, since the establishment of Bank Muamalat Indonesia in 1991, has experienced rapid growth, reaching its peak in 2019. This growth is evident not only in financial aspects but also involves a broader performance assessment, including Sharia principles and organizational governance. The assets of Islamic banks have achieved remarkable milestones, strengthening Indonesia's position as a key player in the global Islamic banking arena. New approaches such as the Sharia Maqhasid Index (SMI) highlight the attainment of Sharia goals, while fund management and the phenomenon of mergers between BRIS, Mandiri Syariah, and BNI Syariah forming Bank Syariah Indonesia (BSI) underscore the urgency of assessing asset liability management in the context of sustainability in Indonesia's Islamic banking sector.

Analisis Determinan Kinerja Keuangan Pada Lima Asset Perbankan Syariah Periode Tahun 2019-2022

This research aims to analyze the determinants of financial performance in the five largest assets of Islamic banks during the period of 2019-2022. The research method used is quantitative research with a secondary data approach. The data used is obtained from the financial reports of the top five Islamic banks in Indonesia. The analysis technique employed in this study is panel regression analysis using SPSS 27 for multivariate analysis. The findings of the research indicate that the Earning Asset to Asset Ratio (EATAR) has a significant and very weak impact on Return On Asset (ROA), with an impact of 0.0196%. This suggests that the management of EATAR needs to be considered, even though its impact on ROA is relatively low. Similarly, the Loan to Deposit Ratio (LDR) and Net Interest Margin (NIM) also have a significant and weak influence on ROA, with impacts of 4.12% and 1.18% respectively. Furthermore, EATAR, LDR, and NIM have a significant and very weak effect on the Capital Adequacy Ratio (CAR), with impacts of 0.17%, 0.38%, and 0.47% respectively. However, when considered simultaneously, these three variables do not have a negative and significant influence on both ROA and CAR in the five Islamic banks in Indonesia. The combined effect of the three variables on ROA and CAR is relatively low, at 6.50% and 10% respectively. The predominant result of this research indicates that the Capital Adequacy Ratio (CAR) has a significant and sufficiently strong impact on Return On Asset (ROA), with an impact of 4.36%. This suggests that an adequate level of capital adequacy can contribute positively to the bank's profitability.

An Analysis of Musyarakah Agreement Due to the Bank's Negligence in Implementing Prudential Banking Principle: The Case of Jurisprudence at the Supreme Court Cassation Verdict Number 624 K/Ag/2017

This study analyzed the Supreme Court Cassation Verdict Number 624 K/Ag/2017, regarding the musyarakah agreement between the customer and PT. Bank Sumut Padangsidimpuan Branch, in which the latter had disbursed financing to the customer before the issuance of a life insurance policy letter. The focus of the research was to investigate the settlement of the musharakah agreement due to the negligence of the bank which resulted in the customer’s obligation to pay the remaining debt based on the Supreme Court Cassation Verdict Number 624 K/Ag/2017. The study used a qualitative research approach with a case approach, statute approach, and conceptual approach. This study concludes that based on the Compilation of Sharia Economic Law (Kompilasi Hukum Ekonomi Syariah or KHES) Articles 209-210 if one of the parties in the agreement dies, the contract ends, and the loss caused by the death of the mudharib is borne by the owner of the capital. Therefore, even though in a musyarakah contract there is a mix of assets of both customers and Islamic banks. However, because the bank was negligent in their prudential banking principles practice and this action was against the law, then in regards to the legal protection theory, the losses experienced from the musyarakah contract should have been borne by the bank as a form of punishment for the unlawful act due to negligence in implementing the prudential banking principle.

Interaksi Bank Syariah dan Variabel Makroekonomi dalam Mendorong Pertumbuhan Ekonomi di Negara Berkembang

This study aims to examine the empirical impact of the Islamic banking sector, inflation rate, and currency exchange rate on the economic growth of Saudi Arabia, United Arab Emirates, Kuwait, Malaysia, Qatar, Bahrain, and Bangladesh from 2014 to 2022. For the purpose of further investigation, a total of 717 observations were selected according to certain criteria. The sample consisted of 24 banks from seven countries that have the highest aggregate assets on a global scale. Data is collected quarterly. This research approach is quantitative research using the Vector Error Correction Model as an analysis technique. Long-term analysis is tested using cointegration analysis. Impulse response function (IRF) and variance decomposition (VD) techniques were used in this study to show how each macroeconomic variable shock affects the short-term dynamic path of all system variables. The results of the study found that the shock of the majority of research variables was responded positively by GDP except for inflation which in the initial period of the shock was responded negatively by GDP. The results of the Variance Decomposition GDP analysis can be explained that in the initial period GDP variance was formed sequentially from the exchange rate variance, inflation, Total Assets of Islamic Banks, Total Assets of Islamic Banks, and the contribution of Islamic bank assets continued to increase during the observation period.

Impact of the Capital Adequacy Ratio (CAR) and Mudharabah on the Return on Asset (ROA) on Sharia General Banks Registered in the Financial Services Authority (OJK)

The objective of this study was threefold: (1) to assess the impact of the capital adequacy ratio on the return on assets of Islamic Commercial Banks that are registered with the Financial Services Authority (OJK), (2) to examine the influence of mudharabah return on assets at Islamic Commercial Banks registered with OJK, and (3) to ascertain the combined effect of the capital adequacy ratio and mudharabah return on assets at Islamic Commercial Banks registered with OJK. The investigation was carried out throughout the period spanning from July to August of 2021. The research undertaken employed a quantitative-descriptive methodology, utilizing an associative approach. The utilized data source consisted of secondary data. The population under consideration encompasses the complete set of financial statements belonging to Islamic Commercial Banks (ICB) in Indonesia that were registered with the Otoritas Jasa Keuangan (OJK) throughout the period spanning from 2016 to 2020. The employed sample approach was the saturation sampling technique. The data was acquired from a collection of financial records comprising a total of 60 samples. The approaches employed for data collection involved the utilization of observation and documentation methods. The employed methodology for data analysis was multiple linear regression. The findings of this study suggest that there is a positive and statistically significant relationship between the capital adequacy ratio and return on assets at Islamic Commercial Banks, albeit to a partial extent. (2) The impact of mudharabah on the return on assets of Islamic Commercial Banks was found to be insignificant. (3) However, when considering the capital adequacy ratio and mudharabah together, a positive and substantial relationship was observed with the return on assets of Islamic Commercial Banks. The findings of the aforementioned study indicate that the capital adequacy ratio and mudharabah significantly impact the return on assets of Islamic Commercial Banks that are registered with the Otoritas Jasa Keuangan (OJK). Hence, the bank possesses the ability to oversee and uphold the standard of the capital adequacy ratio and mudharabah on return on assets (ROA) in order to enhance the bank's profitability. The findings suggest that both the capital adequacy ratio and mudharabah exhibit a favorable influence on the return on assets, as they demonstrate a positive impact and the ability to enhance bank profitability.

Pengaruh BOPO, CAR, Pembiayaan Mudharabah dan Pembiayaan Murabahah terhadap Return On Asset (ROA) Bank Umum Syariah Indonesia Periode 2020-2022

he purpose of this research is to look at the impact of Operating Costs on Operating Income (BOPO), Mudharabah Financing, Capital Adequacy Ratio (CAR), and Murabahah Financing on the Return on Assets (ROA) of Islamic commercial banks in Indonesia from 2020 to 2022. The study's sample consists of Islamic commercial banks whose financial reports are included in Islamic banking statistics. Purposeful sampling technique was used to choose the sample. Utilizing Eviews 12 software, multiple linear regression analysis is the data analysis approach employed in this quantitative research method. The findings demonstrate that CAR, Mudharabah Financing, and Murabahah Financing have a substantial impact on the ROA of Islamic commercial banks in Indonesia, however BOPO has no effect on the dependent variable. This study contributes significantly to our understanding of the elements that determine the ROA of Islamic commercial banks in Indonesia. The findings of the study can help bank management make more effective decisions to improve financial performance. Further research could include more variables or prolong the study period to obtain a more complete picture of the factors influencing the ROA of Islamic commercial banks in Indonesia.
 Keywords: BOPO, CAR, Mudharabah Financing, Murabahah Financing, and ROA

Convergence in Islamic financial development: Evidence from Islamic countries using the Fourier panel KPSS stationarity test

This study investigates whether there is convergence among Islamic countries with respect to the relationship between growth in Islamic financial markets and economic growth in those countries as measured by Gross Domestic Product. We use data from 2013 to 2021 for the nine Islamic countries with the highest levels of activity in Islamic finance. We employ the Fourier Panel KPSS Stationarity Test to examine the convergence hypothesis for four indicators of Islamic financial markets activity: Islamic Financial Asset Volume (IFAV), Islamic Banking Asset Volume, Sukuk Outstanding Volume, and Takaful Contribution Volume. Our analysis reveals that only IFAV exhibits convergence, while the other indicators do not. We also evaluate country-specific convergences within each indicator and find different results. Our study provides essential guiding findings regarding the significance of Islamic finance growth for countries and their prospects.

Financing and returns of Shari’ah-compliant contracts and sustainable investing in the Islamic banking of Oman

The present study used quarterly data from 2014 to 2020 to analyse the financing and returns of Shari’ah-compliant contracts in Oman based on murābahah, ijārah muntahia bittamlīk and wakālah Islamic banking tools and their relationship to sustainable investing, which was measured using three pillars of governance: capital adequacy, asset quality, and risk sensitivity. The autoregressive distributed lag (ARDL) model results revealed significant negative short- and long-run relationships between the financing and returns of Shari’ah-compliant contracts and sustainable investing in Islamic banking in Oman, which was measured by asset quality, capital adequacy, and risk sensitivity except there was a significant positive long-run relationship between the financing of Shari’ah-compliant contracts and capital adequacy in the short run. Additionally, insignificant long-run relationships existed between the financing of Shari’ah-compliant contracts and capital adequacy. The study’s main conclusion is that Shari’ah governance practices in Oman may ensure and support asset quality and the capital adequacy ratio. Furthermore, the findings indicated that the capital-to-risk weighted assets ratio protects depositors and promotes financial comprehensive systems’ stability, credibility, and efficiency. The study’s main recommendation is that Oman should increase Islamic banking assets and enhance the legal and regulatory system to promote the development of Islamic banking services that are compliant with the standards of the Islamic Financial Services Board and the Accounting and Auditing Organization for Islamic Financial Institutions.

Peran Perbankan Syariah dalam Mengembangkan UMKM di Masa Pandemi Covid-19

The study aims to analyze the role of Islamic banking in efforts to develop MSMEs during the Covid-19 pandemic in terms of the financing provided. The method used is quantitative descriptive by presenting information about the development of Islamic banking financing from 2017-2020. Assets owned by Islamic banking continue to increase from year to year, three years in a row before the entry of the Covid-19 pandemic to Indonesia. Islamic banking assets continue to increase even in 2020 where the pandemic has started to enter Indonesia, it can be seen that Islamic banking assets continue to increase to close to Rp. 70 trillion from the previous year. Turnover of funds in various business sectors carried out by Islamic banks is increasing from year to year, but is also always accompanied by an increase in non-performing financing.

Pengelolaan dan Pengembangan Wakaf Produktif: Studi Interkoneksi Bank Umum Syariah (BUS) dengan Lembaga Filantropi Islam

This research focuses on the management and development of productive waqf through an interconnected pattern between Islamic Commercial Banks (BUS) and Islamic Philanthropic Institutions at Bank Syariah Indonesia (BSI) and BSI Maslahat. This research is based on 3 questions, there are: (1) what is the interconnection pattern of Islamic Banks with Nadzir Institutions in the development of productive waqf?; (2) what is the significance of the management and development of productive waqf in Islamic Banks with the Nadzir Institution?; and (3) is it possible for waqf funds to become funding for strengthening Islamic Bank assets? There are 2 sources of data used in this study, namely: (1) data in the form of documents in the form of financial reports, company websites, and other supporting documents; and (2) interview data with respondents. The data that has been obtained, then analyzed using qualitative analysis using the Miles & Huberman interactive model. Referring to the research questions, answers were obtained, including: (1) the pattern of interconnection that occurs between Bank Syariah Indonesia (BSI) and BSI Maslahat is a symbiotic interconnection of mutualism; (2) Islamic banks must actively control waqf management carried out by nadzirs; and (3) cash waqf can be an instrument to increase the liquidity of Islamic Banks.Waqf Management;Interconnection; and Islamic Bangking Liquidity

FAKTOR-FAKTOR YANG MEMPENGARUHI PERTUMBUHAN TOTAL ASET PERBANKAN SYARIAH DI INDONESIA

This study aims to determine the internal and external factors that affect the growth of total Islamic banking assets in Indonesia. The data used in this study came from the published financial statements of each Islamic bank. The analytical method used in this study is annual time series data from 2016 to 2020. This study uses a causal quantitative approach. The sampling technique used is purposive sampling. The variables used in this study are Capital Adequacy Ratio (CAR), Financing to Deposit Ratio (FDR), Non-Performing Financing (NPF), Third Party Funds, Gross Domestic Product, Interest Rates, and Inflation. The analytical method used is Multiple Linear Regression Analysis. The results showed that partially internal factors, only CAR and DPK , had a significant effect on the growth of total assets; simultaneously, internal factors had a significant effect on the growth of total assets. Then the research results on external factors partially do not affect the growth of total Islamic banking assets. At the same time, it simultaneously does not affect the growth of total Islamic banking assets.