Comparative analysis of efficiency, asset quality, and stability of sharia banks and conventional banks in Indonesia for the period 2010-2018
This paper examines the comparative performance of sharia banks and conventional banks for the period 2010-2018. The financial performance itself is seen from 3 aspects, namely efficiency, asset quality, and stability. Based on previous empirical research, the indicators used to measure effectiveness are BOPO, asset quality with NPF (sharia banks) and NPL (conventional banks), and stability with Z scores. This research was conducted at sharia banks and conventional banks in the period 2010-2018 and used secondary data. The sample used was selected by purposive sampling. The data used in this study were obtained from financial statements collected and published through the Otoritas Jasa Keuangan (O.J.K.) website www.ojk.go.id, the Osiris database, and the website of each bank that was used as a research sample and tested using two different statistical techniques average (independent sample test). Previous empirical studies show that sharia banks have better performance compared to conventional banks in times of crisis. Meanwhile, data from the World Islamic Banking Competitiveness Report in 2016 stated that sharia banks are developing more rapidly than conventional banks in the post-crisis period. The results of this study indicate that the rapid development of sharia banks compared to conventional banks in the post-crisis period was followed by the consistency of performance (better than conventional banks), as shown in the crisis period. There are several reasons in this regard such as excessive aggressiveness in lending by conventional banks, the principle of profit and loss sharing that creates transparency between parties and capital-based transactions so that financing has a real back up of assets. Therefore, the sharia system is an alternative to the existing conventional system because of the principle of justice, and Falah is an essential pillar in the sharia banking system.