Presenters: Dini Lestary, Fitri Jayanti, Samsul Hidayat
Affiliation: IAIN Pontianak
Room: 5
ICIES News- At the 4th International Conference on Islamic Economics Studies (ICIES) 2024, researchers Dini Lestary, Fitri Jayanti, and Samsul Hidayat from IAIN Pontianak presented their comprehensive analysis titled “Financial Performance of Islamic Banks in Indonesia and Malaysia: Based on Sharia Conformity, Profitability, and Islamic Corporate Governance.” This study aims to assess the financial health and governance of Sharia Commercial Banks (BUS) in the two countries, focusing on the period from 2021 to 2022.
The researchers employed quantitative descriptive techniques to analyze the financial performance data of Islamic banks in Indonesia and Malaysia, utilizing metrics of Sharia conformity, profitability, and the application of Islamic Corporate Governance (ICG). The data were sourced from the annual reports of each bank, providing a robust basis for the analysis.
The findings of the study using the Sharia conformity and profitability method indicated that the sample of Sharia Commercial Banks is distributed across four quadrants: Upper Right Quadrant (URQ), Lower Right Quadrant (LRQ), Upper Left Quadrant (ULQ), and Lower Left Quadrant (LLQ). Among the banks, Bank BCA Syariah (BCAS), Bank Syariah Indonesia (BSI), and National Pension Savings Bank (BTPNS) emerged as the top performers, being positioned in the URQ, which denotes the highest level of financial performance.
In terms of Islamic Corporate Governance (ICG), the study revealed that Bank Muamalat Malaysia Berhad (BMMB) led the rankings with an ICG index of 62%, followed closely by Bank BCA Syariah (BCAS) from Indonesia with an index of 56%. This highlights the strong governance practices in place at these institutions, which contribute to their overall financial stability and compliance with Sharia principles.
The presentation emphasized the importance of good financial performance for Islamic banks to maintain public trust and enhance competitiveness. The implementation of rigorous Sharia conformity and robust governance frameworks were identified as key factors driving the success of these banks.
Lestary, Jayanti, and Hidayat concluded that the results underscore the need for continuous improvement in financial practices and governance standards within Islamic banks. The study provides valuable insights into the performance metrics that matter most in the Islamic banking sector and offers a benchmark for other institutions striving to achieve excellence in financial and governance practices.
The research presented at ICIES 2024 not only sheds light on the current state of Islamic banking in Indonesia and Malaysia but also paves the way for future studies aimed at enhancing the efficacy and integrity of Sharia-compliant financial institutions.