A COMPARATIVE STUDY BETWEEN CONVENTIONAL AND ISLAMIC COMMERCIAL BANKS IN TERMS OF SHAREHOLDERS EFFICIENCY OVER THE PERIOD 2010- 2016

• Main Author: Zuhriyah Mukaromah (NIM 19014039), Latif
• Format: Final Project
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/22871
• Institution: Institut Teknologi Bandung

The growth of Islamic Banking shows a good reputation globally and locally, in this case in <br /> <br /> Indonesia. Based on Islamic Financial Service Industry Stability Report 2016, their growth has been <br /> <br /> moderating in recent years over the sample 59 of banks in 11 countries. It is shown by the number <br /> <br /> of Compound Annual Growth Rate (CAGR) in the last three years (2011-2014) has been at 13.8%, <br /> <br /> compared to the CAGR in the last six years (2008-2014) at the number 15.4% and three years at <br /> <br /> 2008-2011 is 17.1%. In Indonesia, over the latest ten years which is from the end of 2008 till 2015, <br /> <br /> the total asset growth of Islamic banking is growing faster than conventional bank. With comparison <br /> <br /> 22% per year for Islamic Banking and 11% for Conventional Banking. Despite of the fact, Karim <br /> <br /> Business Consulting which is trusted by public as the credible consulting in banking industry, has <br /> <br /> perdicted that the growth of Islamic Banking will slow-moving because of small economic of scale <br /> <br /> due to the capital and capacity and even there only one Islamic Commercial Bank that will be <br /> <br /> categorized as BUKU 3. Capital in here means the amount of funds used to run the business <br /> <br /> activities, generally obtained by issuing shares, while capacity means the ability of bank to serve <br /> <br /> their customer in terms of lending activities (Otoritas Jasa Keuangan, 2017). Since there a different <br /> <br /> between the fact and prediction, even the growth of Islamic Banking are faster than Conventional <br /> <br /> Banking. Thus, this research is conducted to measure the shareholders eficiency of Islamic <br /> <br /> Commercial Banks then compared to Conventional Banks. <br /> <br /> There two main methods that used in this research. First is Variable Return to Scale (VRS) Data <br /> <br /> Envelopment Analysis (DEA) and the second is Spearman’s Correlation. VRS DEA is used since <br /> <br /> can measure the efficiency realistically , while Spearman’s Correlation is to determine the relation <br /> <br /> between shareholders efficiency and its growth (its total assets, its growth). Mann-Whitney test also <br /> <br /> applied in this research to measure statistically significant diffrence. For addition Kolmogorov- <br /> <br /> Smirnov is applied to test the normality. <br /> <br /> The findings shows that for annualy analysis there are two years where indicate there a statistically <br /> <br /> significant difference between Conventional Banks and Islamic Commercial Banks, they were on <br /> <br /> 2010 and 2012. In 2010 the shareholders efficiency score of Conventional is higher than Islamic <br /> <br /> Commercial Banks. In 2012 the result shows contrary, the shareholders efficiency score of Islamic <br /> <br /> Commercial Banks is higher than Conventional Banks. For single multi-year analysis result shows <br /> <br /> there is no significant different. The efficiency trend of each bank is declining over the period 2010- <br /> <br /> 2016. And the Spearman’s Correlation shows different result for each bank. In Conventional bank <br /> <br /> there were a negative very weak correlation of shareholders efficiency toward its growth, which is <br /> <br /> mean the higher total assets of bank the lower benefit that shareholders get. In Islamic Commercial <br /> <br /> Banks there were a positive weak correlation, which is mean, the higher total assets of bank the <br /> <br /> higher benefit that shareholders get