Macroeconomic Factors Affecting Financial Performance in Islamic Banks and Conventional Banks: A Comparative Analysis

Siti Maryama, Berlianingsih Kusumawati, Sulistyo Seti Utami, Ermalina Ermalina, Tatum Artha

Abstract


This study aims to determine macroeconomic factors that affect the financial performance of Islamic and conventional banking. This study uses PLS-SEM to determine the macroeconomic factors that affect the performance of Islamic and conventional banking. The data used is secondary data with a time span of 2018-2022 for all Islamic and conventional banks in Indonesia. The results of this study are external macroeconomic factors that significantly affect the financial performance of Islamic banks with a value of 0.000 and conventional banks with a value of 0.000. However, the most influential Islamic bank is the capital adequacy ratio (CAR) with a value of 35.429, while the financial performance factor of conventional banks is the loan to asset ratio (LAR) with a value of 45.177. This research is expected to be an early warning system for Islamic banks and conventional banks in Indonesia.


Keywords


Macroeconomics; financial performance; islamic banking; conventional banking

Full Text:

PDF

References


Ahmad, C., Amelia, E., Putra, I. (2021). The Effect Of Capital Adequacy Ratio (Car), Return On Asset (Roa), Inflation, Bi Rate On Troubled Financing In Shariah Rural Banks In Indonesia 2015-2019. jeps, 1(9), 19-30. https://doi.org/10.46899/jeps.v9i1.219

Ahmad, N., Naveed, A., Ahmad, S., & Butt, I. (2020). Banking sector performance, profitability, and efficiency: a citation‐based systematic literature review. Journal of Economic Surveys, 185-218.

Al-Emran, M., Mezhuyev, V., & Kamaludin, A. (2019). PLS-SEM in information systems research: a comprehensive methodological reference. Proceedings of the International Conference on Advanced Intelligent Systems and Informatics 2018 , 644-653.

Alfadli, A., & Rjoub, H. (2020). The impacts of bank-specific, industry-specific and macroeconomic variables on commercial bank financial performance: evidence from the Gulf cooperation council countries. Applied Economics Letters (, 1284-1288.

Anto, R., Pangestusti, I., Purwandari, E. (2021). Determinants Of Bank Efficiency In Asean5: Size As a Control Variable. ujaf, 4(9), 542-547. https://doi.org/10.13189/ujaf.2021.090402

Avlokulov, A. (2018). Return On Assets and Financial Soundness Analysis: Case Study Of Grain Industry Companies In Uzbekistan. IJMSBA, 6(4), 52-56. https://doi.org/10.18775/ijmsba.1849-5664-5419.2014.46.1006

Cable, D. M., & DeRue, D. S. (2002). he convergent and discriminant validity of subjective fit perceptions. Journal of applied psychology,, 875.

Cheah, J. H., Sarstedt, M., Ringle, C. M., Ramayah, T., & Ting, H. (2018). Convergent validity assessment of formatively measured constructs in PLS-SEM: On using single-item versus multi-item measures in redundancy analyses. International Journal of Contemporary Hospitality Management, 3192-3210.

Cronbach, L. J. (1951). Coefficient alpha and the internal structure of tests. psychometrika, 16(3), 297-334.

Elnahass, M., Trinh, V. Q., & Li, T. (2021). Global banking stability in the shadow of Covid-19 outbreak. Journal of International Financial Markets, Institutions and Money,, 1-32.

Fakhri, U. N., & Darmawan, A. (2021). Comparison of Islamic and conventional banking financial performance during the covid-19 period. International Journal of Islamic Economics and Finance (IJIEF), 19-40.

Fakhri, U. N., & Nuriyah, A. (2022). The impacts of Covid-19 on macroeconomic indicators and the performance of Islamic banks in Indonesia. 8(2)(206–220).

Fakhri, U. N., Anwar, S., & Ismal, R. (2020). Comparison of sharia and conventional banking bankruptcy rates in Indonesia. Tazkia Islamic Finance and Business Review, 125-141.

Gautam, P., Gautam, T. (2021). Role Of Macroeconomic Factors Predicting Financial Performance Of Commercial Banks In Nepal. Int. Res. J. Mgt. Sci., 1(6), 39-52. https://doi.org/10.3126/irjms.v6i1.42337

Hair, J., Hollingsworth, C.L., Randolph, A.B. and Chong, A.Y.L. (2017), "An updated and expanded assessment of PLS-SEM in information systems research", Industrial Management & Data Systems, Vol. 117 No. 3, pp. 442-458. https://doi.org/10.1108/IMDS-04-2016-0130

Hamzah, A., Nurhayati, E., Martika, L., Puspasari, O., Nurhaliza, S. (2022). Effect Of Operating Expenses Of Operating Income, Loan To Deposits Ratio, Non Perfoming Loan On Profitability With Capital Adequacy Ratio As a Moderating Variable.. https://doi.org/10.4108/eai.2-12-2021.2320239

Hardiyanti, W., Febriatmoko, B., Wulandari, S., Ma'sum, M. (2020). Identification Of Southeast Asian Banking Performance.. https://doi.org/10.2991/aebmr.k.210311.077

Hidayat, S. E., Sakti, M. R., & Al-Balushi, R. A. (2021). Risk, efficiency and financial performance in the GCC banking industry: Islamic versus conventional banks. Journal of Islamic Accounting and Business Research, 564-592.

Idawati, D. (2023). Impact Of Macroeconomic Factors On Financial Performance Of Commercial Banks In Indonesia. JOFA, 2(7), 1-10. https://doi.org/10.53819/81018102t4129

Idfilandu, S., Saripudin, S. (2021). Financial Performance Analysis Of Bank Companies Before and After The Fintech Era. JAF, 2(5), 89. https://doi.org/10.25124/jaf.v5i2.4009

Istan, M., Fahlevi, M. (2020). The Effect Of External and Internal Factors On Financial Performance Of Islamic Banking. jesp, 1(21). https://doi.org/10.18196/jesp.21.1.5036

Jumran, A., Hendrawan, R. (2021). Stock Valuation Using Discounted Cash Flow Method With Free Cash Flow To Equity and Relative Valuation Approaches On State-owned Banks Listed On Idx For 2021 To 2025 Period Projection. IJSMS, 191-201. https://doi.org/10.51386/25815946/ijsms-v4i4p118

Kariya, A. (2020). Earnings-Based Borrowing Constraints & Corporate Investments in 2007-09 Financial Crisis. Journal of Corporate Finance, Forthcoming, 1-51.

Khaddafi, M., Heikal, M., & Nandari, A. (2017). Analysis Z-score to predict bankruptcy in banks listed in Indonesia stock exchange. International Journal of Economics and Financial Issues, 326-330.

Li, Z., Feng, C., & Tang, Y. (2022). Bank efficiency and failure prediction: a nonparametric and dynamic model based on data envelopment analysis. Annals of Operations Research, 279-315.

Marlina, R. (2022). Determinants Of Bank Profitability In Indonesia Based On Commercial Bank Business Activities (Buku). JBFEM, 1(5), 31-46. https://doi.org/10.32770/jbfem.vol531-46

Mubarok, F., Fatimah, E. (2022). Economic Pressure On the Interest Margin Of Banks In Indonesia. JPEB, 1(7), 11-20. https://doi.org/10.33633/jpeb.v7i1.4366

Mustafa, O. (2019). Assessment Of the Financial Performance Of Islamic Commercial Banks In Sudan Under Credit Risk And Inflation Pressures (1995-2017). JIBF, 1(7). https://doi.org/10.15640/jibf.v7n1a2

Nugraha, Y., Ay, B., Damayanti, R. (2019). Analisis Pengaruh Jumlah Kredit, Loan To Asset Ratio (Lar), Dan Loan To Deposit Ratio (Ldr) Terhadap Non-performing Loan DI Pt Bank Rakyat Indonesia (Persero) Tbk Cabang Wonogiri Tahun 2018. JIE, 02(3). https://doi.org/10.29040/jie.v3i02.632

Otoritas Jasa Keuangan (OJK). (2021, September). Snapshot Perbankan Syariah September 2021. Retrieved from https://ojk.go.id/id/kanal/syariah/berita-dan-kegiatan/publikasi/Pages/Snapshot-Perbankan-Syariah-September-2021.aspx

Ototitas Jasa Keuanagn (OJK). (2021). STATISTIK PERBANKAN SYARIAH. Retrieved from https://www.ojk.go.id/id/kanal/syariah/data-dan-statistik/statistik-perbankan-syariah/Default.aspx

Paraschiv, G., Moiceanu, G., Voicu, G., Chitoiu, M., Cardei, P., Dinca, M. N., & Tudor, P. (2021). Optimization Issues of a Hammer Mill Working Process Using Statistical Modelling. Sustainability, 973.

Prior, D., Tortosa-Ausina, E., García-Alcober, M. P., & Illueca, M. (2019). Profit efficiency and earnings quality: Evidence from the Spanish banking industry. Journal of Productivity Analysis, 153-174.

Rinjani, T. (2022). Analysis Of Risk Profile, Good Corporate Governance, Earnings, Capital: Health Calculation Method At Bank Perkreditan Rakyat. CASHFLOW, 1(2), 164-174. https://doi.org/10.55047/cashflow.v2i1.454

Rofiqo, A., Afrianti, N. (2019). The Influence Of Sharia Banking Characteristics and Macroeconomics Factors On Sharia Banking Profitability: Empirical Studies In Indonesia. IJIBE, 1(4), 540. https://doi.org/10.30659/ijibe.4.1.540-550

Rustam, Z., Nadhifa, F., & Acar, M. (2018). Comparison of SVM and FSVM for predicting bank failures using chi-square feature selection. Journal of Physics: Conference Series, 1-7.

Sholihin, M., & Ratmono, D. (2021). Analisis SEM-PLS dengan WarpPLS 7.0 untuk hubungan nonlinier dalam penelitian sosial dan bisnis. Penerbit Andi.

Silaban, P. (2017). The Effect Of Capital Adequacy Ratio, Net Interest Margin and Non-performing Loans On Bank Profitability: The Case Of Indonesia. IJEBA, Issue 3(V), 58-69. https://doi.org/10.35808/ijeba/135

Stephani, R., Adenan, M., Hanim, A. (2017). Analisis Pengaruh Rasio Keuangan Terhadap Kinerja Bank Umum DI Indonesia. eJEBA, 2(4), 192. https://doi.org/10.19184/ejeba.v4i2.5825

Sulong, Z., Yahya, H., M., & Salleh, Z. (2020). A study on the efficiency and stability of different categories of banks in Malaysia. The Journal of Muamalat and Islamic Finance Research, 1-13.

Susnita, T. (2022). The Effect Of the Minimum Capital Availability Obligation (Car) On Profitability (Roa) At Perumda Bpr Majalengka, Majalengka Regency. Return, 01(1), 24-28. https://doi.org/10.57096/return.v1i01.3

Sutrisno (2016). Risk, Efficiency and Performance Of Islamic Banking: Empirical Study On Islamic Bank In Indonesia. Asian Journal of Economic Modelling, 1(4), 47-56. https://doi.org/10.18488/journal.8/2016.4.1/8.1.47.56

Tim Redaksi, C. I. (2023, March 23). Bank-bank Top Dunia Ambruk & Bangkrut, Ini Sebenarnya Terjadi. Retrieved from https://www.cnbcindonesia.com/news/20230323152510-4-423979/bank-bank-top-dunia-ambruk-bangkrut-ini-sebenarnya-terjadi

Visaria, S. (2009). Legal Reform and Loan Repayment: The Microeconomic Impact Of Debt Recovery Tribunals In India. American Economic Journal: Applied Economics, 3(1), 59-81. https://doi.org/10.1257/app.1.3.59

Wang, W., Jin, Z., Jie, J. (2015). The Effect Of Political Connections On Corporate Environmental Social Responsibility: Large Sample Evidence From China.. https://doi.org/10.2495/feem140761

Windriya, A. (2019). The Effect Of Fdr, Npf, Oeoi, and Size Toward Roa (Comparative Study On Indonesian Islamic Bank And Malaysian Islamic Bank Periode 2010-2015). IJIBEC, 1(3), 12-26. https://doi.org/10.28918/ijibec.v3i1.1426

Yang, B., & Zhou, Z. (2019, March). Research on Impact of Macroeconomic Uncertainty on Credit Supply of Commercial Banks in China. In International Academic Conference on Frontiers in Social Sciences and Management Innovation (IAFSM 2018) (pp. 118-134). Atlantis Press. https://doi.org/10.2991/iafsm-18.2019.19




DOI: https://doi.org/10.33258/birci.v6i3.7676

Article Metrics

Abstract view : 2 times
PDF - 2 times

Refbacks

  • There are currently no refbacks.


Creative Commons License
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

 

Creative Commons License
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.