Date: 20-09-2020 Digital Publication Services : OSREL | JABM | JAM | ABMR | ABMCS

Performance of Conventional Banks Vs Islamic Banks: Evidence from Indonesia

Author Nevi Danila
Category Akuntansi Manajemen dan SIA


Good performance of the banks are very crucial for stability of economy. The emergence of Islamic banks can not be undermined. They also play important role in the economy. This paper investigates the determinants of the banks’ performance from the bank-specific and macroeconomic perspective. Performance index is constructed base on CAMEL indicators. Panel data of conventional and Islamic banks from 2010 to 2016 is employed. Fixed-effects Model with robust heterocedasticity-autocorrelation standard errors is used. The private and non-government owned banks dominate the best 10 of performance; and the Islamic bank places number one in the rank. Only macroeconomic variables have an impact on the banks’ performance for both conventional and Islamic banks. While bank-specific variables do not influence the performances. Only operating efficiency has an impact on Islamic banks. It suggests that the Government has an important role in controlling the macroeconomic policies for providing the conducive environment of the banks.