Conventional Banks In Indonesia Research Articles

CONVERSION INTO FULL-FLEDGE ISLAMIC BANKS AND IT’S IMPACT ON ASSET: EVIDENCE FROM INDONESIAN ISLAMIC BANKING INDUSTRY

Objective: This study aims to analyze whether the number of assets differs before and after conversion to an Islamic bank. Theoretical Framework: The theoretical framework provides relevant information on Islamic banking and market structure, which forms the basis for the development of hypothesis. Method: Using regression analysis with dummy variables, the study found differences in assets between the pre and post-conversion periods. Results and Discussion: The findings suggest that conversion could be a recommended approach for the Islamic banking industry in Indonesia to accelerate asset growth. Additionally, it offers an optimal solution for smaller-sized conventional banks as an alternative to spin-offs or mergers. Research Implications: This research provides significant contributions to the study of Islamic banking. This research has the implication that conversion can be an alternative strategy for small parent banks. Originality/Value: Several conventional banks in Indonesia have chosen full conversion into Islamic banks as an exit strategy. This decision is in addition to the spin-off option. Bank of Aceh, Bank of NTB and Bank of Riau Kepri completed the full conversion in 2016, 2018 and 2022, respectively. However, research on Islamic bank conversion is still limited.

Measuring Procyclicality Behavior on Islamic and Conventional Banks in Indonesia

Research Originality: This study contributes to capturing credit cycle movements during the COVID-19 pandemic and compares sizes of credit and business cycles to promote banking stability.Research Objectives: This study attempts to examine banking behavior on amplitude and frequency indicators by focusing on the credit property of Islamic and conventional banks from 2014 to 2020.Research Methods: Ordinary Least Square, frequency base filter and turning point analysis are used.Empirical Results: This study unveiled that the size of an Islamic bank’s amplitude was higher than conventional bank’s amplitude. Meanwhile, the size of the frequency of Islamic banks had a longer frequency than conventional banks, given Islamic banks rely on real sector-based financing which has a longer period of economic expansion.Implications: It is also argued that conventional banks have a riskier leverage indicated by a higher percentage of amplitude. Thus, it is recommended to Indonesian banking sectors to promote the growth of Islamic banks to achieve financial stability. This research is significance in showing the Islamic banking’s contribution on stability given Indonesia is taking serious effort becoming the epicentrum of Islamic finance growth in the world.JEL Classification: E51, G01, G21How to Cite:Wiranatakusuma, D. B., & Muttaqin, E. I. (2024). Measuring Procyclicality Behavior on Islamic and Conventional Banks in Indonesia. Etikonomi, 23(1), 249 – 270. https://doi.org/10.15408/etk.v23i1.35293.

Analysis of Determinants That Influence the Profitability of Conventional Banks in Indonesia

This research aims to examine the factors that influence the level of profitability in conventional banking in Indonesia in 2010-2019. This research uses Return on Assets (ROA) as a ratio to describe the level of profitability of commercial banks in Indonesia. The object of this research is conventional banking in Indonesia, with a research sample of 6 groups of conventional banks, namely Persero Banks, Foreign Exchange Private Banks, Non-Foreign Exchange Private Banks, Regional Development Banks (BPD), Joint Venture, and Foreign Banks. The analytical method used in this research is panel data regression analysis with Random Effect Model (REM). The research shows that the spread interest rate, Bank Indonesia Certificate (SBI), and third party funds (DPK) have a positive and significant effect on Return on Assets (ROA). Meanwhile, the interbank liability variable has a negative and significant effect on Return on Assets (ROA). Simultaneously, spread interest rate, SBI, third party funds, and interbank liabilities influence ROA.

Comparative stability analysis of Indonesian banks: Markov Switching-Dynamic Regression for Islamic and conventional sectors.

The banking industry necessitates implementing an early warning system to effectively identify the factors that impact bank managers and enable them to make informed decisions, thereby mitigating systemic risk. Identifying factors that influence banks in times of stability and crisis is crucial, as it ultimately contributes to developing an improved early warning system. This study undertakes a comparative analysis of the stability of Indonesian Islamic and conventional banking across distinct economic regimes-crisis and stability. We analyze monthly banking data from December 2007 to November 2022 using the Markov Switching Dynamic Regression technique. The study focuses on conducting a comparative analysis between Islamic banks, represented by Islamic Commercial Bank (ICB) and Islamic Rural Bank (IRB), and conventional banks, represented by the Conventional Commercial Bank (CCB) and Conventional Rural Bank (CRB). The findings reveal that both Islamic and conventional banks exhibit a higher probability of being in a stable regime than a crisis regime. Notably, Islamic banks demonstrate a greater propensity to remain in a stable regime than their conventional counterparts. However, in a crisis regime, the likelihood of recovery for Sharia-compliant institutions is lower than for conventional banks. Furthermore, our analysis indicates that larger banks exhibit higher stability than their smaller counterparts regarding assets and size. This study pioneers a comprehensive comparison of the Z-score, employed as a proxy for stability, between two distinct classifications of Indonesian banks: Sharia (ICB and IRB) and conventional (CCB and CRB). The result is expected to improve our awareness of the elements that affect the stability of Islamic and conventional banking in Indonesia, leading to a deeper comprehension of their dynamics.

Non-Muslim Customers' Perceptions on Sharia Banking Services: Evidence from Bank Muamalat Indonesia

This research aims to find out and explore the implications of sharia banking service quality in increasing loyalty among non-Muslim customers by taking a sample of non-Muslim customers at Bank Muamalat Indonesia Makassar Branch. This type of research uses qualitative research that is explanatory in nature. Primary data was obtained from observations and interviews with 8 (eight) respondents consisting of 6 non-Muslim customers and 2 employees. The research results concluded that non-Muslim customers' perceptions of banking services at Bank Muamalat were quite good. They consider Bank Muamalat to provide services that are fast response, informative and have a sense of empathy. Bank Muamalat provides the same service standards to all customers, both Muslim and non-Muslim. The mobile banking facilities owned by Bank Muamalat provide many conveniences to customers so that the informants assess that the service facilities owned by Bank Muamalat can compete with conventional banks in Indonesia.

Exploring the Relationship Between Diversification, Risk Bank, Size Bank, and Liquidity; Evidence From Conventional Banking In Indonesia

Banking plays an important role in the economy both micro and macro. In addition, it is crucial for a country to have a strong and robust banking system. To realize a strong and robust banking banks need to maintain their efficiency. Therefore, it is necessary to identify the factors that affect efficiency, including asset diversification, risk, bank size and bank liquidity. The novelty of this research is that there is an asset diversification variable. Asset diversification can protect investors from recurring investment cycles and can save from asset failure. The sample of this research are conventional banks with a total of 10 banks that have the largest share of assets in Indonesia. In this study to identify the effect of asset diversification, bank risk, bank size, and bank liquidity on bank efficiency used multiple linear regression analysis methods were used. This study concludes that asset diversification actually reduces bank efficiency. The increased bank risk, the better efficiency. Then, the size of the bank and liquidity have no effect on efficiency. Therefore, banks need to review the diversification strategy, ensure that the risks associated with each asset and portfolio as a whole are well-identified and look for opportunities to automate repetitive processes and reduce overall operational costs. Through this research, we suggest, (i) Banks need to review the diversification strategy that has been implemented. There may be some areas or types of assets that do not fit the risk profile and objectives of the bank, (ii) Banks need to ensure that the risks associated with each asset and portfolio as a whole are well-identified, measured and managed, (iii) Banks need to look for opportunities to automate repetitive processes and reduce overall operational costs.

ANALISIS KOMPARASI KINERJA KEUANGAN BANK UMUM KONVENSIONAL DAN BANK UMUM SYARIAH SAAT PANDEMI COVID -19

Global economic growth in 2020 contracted by 3.5% from the previous growth of 2.8% in 2019. This contraction was caused by the Covid pandemic - 19 which is not only a health crisis but also a social and economic crisis. To reduce economic pressure due to the Covid-19 pandemic, governments around the world have issued massive and extraordinary stimuli in the form of fiscal stimulus, monetary stimulus, and relaxation policies in the financial services sector. The Covid-19 pandemic is a challenge for the business world, including Islamic banking and conventional banking in Indonesia. Financial performance is an important measure of whether there is an increase in financial companies or vice versa. The data used in this study is secondary data and uses quantitative methods at the time of the Covid-19 Pandemic. The study's results show that based on the average (mean) result of each ratio, the financial performance of Conventional Commercial Banks based on LDR/FDR, CAR, NOM/NIM, and NPL/NPF is better than Islamic Commercial Banks. Meanwhile, based on the BOPO and ROA ratios, the financial performance of Islamic Commercial Banks is better than Conventional Commercial Banks. Based on the results of the independent sample t-test, it is known that the six ratios have significant differences between the financial performance of Conventional Commercial Banks and Islamic Commercial Banks based on LDR/FDR, NPF/NPL.NOM/NIM, ROA, CAR, and BOPO

Analysis of Differences in Financial Performance Between Shari’a Banks and Conventional Banks In Indonesia

Analysis of Differences in Financial Performance Between Shari’a Banks and Conventional Banks In Indonesia

Comparative Study of Financial Performance of Islamic Banks and Conventional Banks in Indonesia

The presence of Islamic banks with the concept of profit sharing has created new competition in the national banking business. Since its inception, Islamic banks have been required to improve their performance to compete with conventional banks, which have long dominated the market share. This study aims to compare Islamic and conventional banks' financial performance in Indonesia for the 2016-2020 period. The research method used is comparative research with a quantitative approach. The research sample consisted of Islamic and conventional banks, each taken by the five largest banks based on asset value. Samples were taken using a purposive sampling technique. Data collection techniques using documentation. The data type used is secondary data in the form of financial ratio reports obtained through the official OJK website. Data analysis techniques used descriptive and comparative analysis in the form of independent sample t-test and Mann-Whitney test. The results of this study indicate that Islamic banks have better performance than conventional banks in terms of the CAR ratio. However, when viewed from the ratio of NPL/NPF, ROA, NIM/NOM, BOPO, and LDR/FDR, Conventional Banks have a better performance. Based on the results of the different tests, it was found that there was no significant difference between the performance of Islamic banks and conventional banks when viewed from the CAR ratio. However, when viewed from the ratios of NPL/NPF, ROA, NIM/NOM, BOPO, and LDR, there are significant differences between the financial performance of Islamic and conventional banks.

Dampak Pertumbuhan Dana Pihak Ketiga, Pertumbuhan Kredit, Risiko Kredit dan Financial Technology terhadap Profitabilitas Bank Konvensional Masa Pandemi Covid-19

This study was conducted with the aim of analyzing the impact of third party funds (DPK), credit growth and financial technology on the profitability of conventional banking during the Covid-19 pandemic. The population is conventional banking in Indonesia listed on the IDX in 2018-2021. Sample selection used purposive sampling technique. The secondary data source used taken from financial reports of samples for the 2018-2021 period and is analyzed using panel data regression technique. The findings indicated that DPK and credit growth have an insignificant effect on bank profitability, credit risk has a negative impact on bank profitability, while financial technology is proven to have a significant effect on bank profitability. The implication of the results is to provide an overview of the impact of DPK growth, credit growth, credit risk, and financial technology on the profitability of conventional banking during the Covid-19 outbreak.

ANALISIS PERBANDINGAN KINERJA KEUANGAN BANK SYARIAH DAN BANK KONVENSIONAL PADA MASA KRISIS EKONOMI GLOBAL

This study aims to perform acomparative analysis of financial performance between Islamic banks and conventional banks during the global economic crisis. This study was conducted to provide a deeper understanding of how these banks performed during the crisis period and to compare the strengths and weaknesses of the two. Quantitative methods are used by analyzing public financial data related to Islamic banks and conventional banks in Indonesia. The results of this study are expected to provide useful insights for practitioners, regulators and decision makers in the banking industry. The findings of this research can become the basis for developing more effective policies in dealing with future economic crises.

The Effect of Market Shere and Bank Characteristics on Profitability Bank

Managerial Efficiency Theory of Profit explains that companies that are managed efficiently will earn profits above the average normal profit. This study aims to test this theory through the influence of Loan to Deposit Ratio (LDR), Market Shere and Operational Cost-Operating Income (BOPO) on Return On Assets (ROA) of Conventional Banks in Indonesia which are listed on the Indonesia Stock Exchange for the 2013-2017 period. By using a purposive technique, there were 8 sample companies according to the criteria for research needs and as many as 40 observational data for 5 years of observation. The research method uses a quantitative approach with multiple regression analysis tools. The results of this study prove partially that Market Shere and LDR have a positive effect and BOPO has a negative effect on ROA, while simultaneously Market Shere, LDR and BOPO have a significant effect on ROA

Comparative Analysis of the Stock Performance of Digital Banks and Conventional Banks in Indonesia

Digitalization in the banking sector shows enormous growth, and the rise of digital banks may be a solution to boost financial inclusion in Indonesia. In recent years, digital banks in Indonesia seem to attract the banking sector, which is reflected in the bank transformation. This study aims to compare digital and conventional banks' risk-adjusted stock performance in Indonesia using commonly used performance measure ratios, such as Sharpe, Treynor, Sortino, and Jensen. Panel data regression with performance ratios as the dependent variables was constructed in this study. The main outcome of this study shows that the performance of digital banks tends to be better than conventional banks. Additionally, the size of banks, return on equity (ROE), and non-performing loans (NPL) tend to be positively associated with risk-adjusted performance. One of the limitations of this research is the absence of prior research on the digital bank. As a result, exploratory research on digital banking can be conducted

Pengaruh Market Requirement Dan Organizational Knowledge Terhadap Business Performance Bank (Unit Usaha Syariah)

ABSTRACK
 
 The research was conducted to determine the effect of market requirements and organizational knowledge on business performance of sharia business units owned by conventional banks in Indonesia. The research method used was a census of all conventional banks that have sharia business units in Indonesia, totaling 20 in the 2020 period. The data collected was analyzed using Smart Partial Least Square version 3.0. The result of the research is that there is a significant effect of market requirement and organizational knowledge variables on the business performance of sharia business units.

ANALISIS KINERJA KEUANGAN PT BANK PERKREDITAN RAKYAT JWALITA DI KABUPATEN TRENGGALEK

Bank is a financial institution whose operations require good financial performance in order to run well. Similarly, the Rural Bank in its operations must be carried out properly as well as the dominant and rapidly growing conventional banks in Indonesia. One way for the bank to run well is to pay attention to its financial performance. The financial ratios used are the RGEC method which includes NPL, LDR, Good Corporate Governance, ROA, BOPO and Capital taken from the annual report for the 2019-2021 period. The type of data used in this research is primary data using virtual ethnography method. Based on the analysis of the financial ratios of PT Bank Perkreditan Rakyat Jwalita, the financial performance in the RGEC method results in a very good financial condition of the Bank in accordance with the criteria of Bank Indonesia.

Financial And Macroeconomic Performance Effect On Net Interest Margins At Conventional Commercial Banks In Indonesia

Banking is an intermediary institution that serves as the driving force of development in Indonesia. Sustainability this institutions depends on the profit derived from Net Interest Margin. However, in its development, bank is influenced by internal performance and macroeconomic conditions. Aims of this study is to determine influence of financial and macroeconomic performance on Net Interest Margin in conventional banking in Indonesia. Net Interest Margin used as dependent variable and Operating Expenses and Operating Income, Loan to Deposit Ratio, interest rates, exchange rates as independent variable. Used regression method, and monthly time series data form financial services authority in 2017-2020. Loan to Deposit Ratio and interest rate have a positive and significant effect on Net Interest Margin while the exchange rate has a negative and significant effect to Net Interest Margin. However, Operating Expenses and Operating Income have not been shown to affect Net Interest Margin. If Banking performance improves, stable macroeconomic conditions, and regulations that support the banking sector, the Net Interest Margin conditions can be conducive

Moderation of Interest Rate Policy Towards Banking Profitability

Purpose: The study aims to analyze the factors that affect the profitability of the banking industry, by making interest rate policy a moderation. Design/methodology/approach: This study uses Structural Equation Modeling (SEM) analysis with panel data from 31 conventional banks in Indonesia during the period 2017-2021 and groups banks based on their core capital into 3 bank groups, namely small banks, medium banks and large banks. Findings: The results showed that capitalization had a significant negative effect on profitability for small banks and medium banks, significantly positive for large banks. Liquidity risk has a significant negative effect on the profitability of large banks. Credit risk has a negative direction towards profitability, significant for small banks and large banks. The interest rate policy is significantly positive for profitability for small banks and mediating banks, negative for large banks. Interest rate policy is only able to moderate capital and credit risk to profitability for small banks. The results of the study explained that small banks are more sensitive and quick to react to changes in interest rate policy than large banks. Research, Practical & Social implications: The research period includes the pandemic period of 2020 - 2021 where the banking industry is impacted by it, so it is possible that there are several anomalous research results. The research implications suggest that banks as fundraisers and dealers are highly dependent on interest rate policy to generate profitability. Originality/value: This study examines banks based on the core capital group owned, which is one of the first studies to include interest rate policy as a moderation variable that affects profitability.

EFEK SUBSTITUSI PERTUMBUHAN PINJAMAN PEER-TO-PEER (P2P) TERHADAP PERTUMBUHAN KREDIT BANK KONVENSIONAL DI INDONESIA

<p align="justify">Peer-to-peer (P2P) platforms have developed rapidly in the financial industry in Indonesia. The rapid P2P Platform influences the banking sector in Indonesia so that it is important to examine the effect of P2P loan growth on banking credit growth from various perspectives to gain a deeper understanding. This study aims to examine the effect of peer-to-peer (P2P) loan growth on the credit growth performance of conventional banks in Indonesia from July 2019 to March 2020 using data from 33 provinces in Indonesia. The results of this study indicate that P2P loan growth has a significant negative effect on overall banking credit growth.</p><p><strong>Key words:</strong> P2P, peer-to-peer, Fintech, Banking Credit, Loan</p>

Intention to Saving of Z Generation at Islamic Bank in Bandung Raya

A phenomenon the low number of customers using Islamic banking compared to conventional banking in Indonesia, where the majority of the population is a Muslim. Then, potential islamic bank customer groups are students or people with an age range between 18 to 24 years, which is the potential of West Java Province as the largest population of Z generation. The research objective to analyze the factors that influence individual behavioral intentions to saving in islamic bank by using the Theory of Planned Behavior (TPB). 100 questionnaires were distributed to people belonging to the Z generation category in Bandung Raya. Data from the questionnaire were analyzed using structural equation modeling (SEM). Results explain there is a positive effect of intention on saving behavior, positive effect of subjective norms on intention, positive effect of PBC on intention, the effect of religiosity on intention, and positive effect of costumer satisfaction on saving behavior.

Determinant of Professionalism and Religiosity to Increase the Performance of Bank Institution: Case Study on Permata Bank Indonesia

This study aims to analyze the level of efficiency of Permata Bank employees through the Data Envelopement Analysis (DEA) in the current period from 2017-2021 as well as the level of development of Conventional Banks in Indonesia. The research employed quantitative method to examine the relationship between two or more variables. This study examined the efficiency value are Net Income, Cash, and Financial Performance from Conventional Bank Indonesia period 2017–2021. The data collection method used in this study was by collecting financial report data and surveys related to Indonesian Conventional Bank for the 2017-2021 period. This study used definition of data envelopement analysis (DEA). The result found that the level of efficiency of Conventional Banks and the Islamic value of their employees during the analysis period has increased significantly over time and can apply the concept of work-life balance in their daily routines. The result of this study contribute to the improvement of the bank performance by professionalism and religiosity as a determinant variable.