ISLAMIC AND CONVENTIONAL BANK FINANCIAL PERFORMANCE: A COMPARATIVE STUDY IN INDONESIA

Abstract

This research is motivated by the existence of a high gap between conventional banks and Islamic banks seen from market share where Islamic banks are far behind conventional banks in a Muslim-majority country. This study aims to see the differences between Islamic banks and conventional banks in Indonesia measured by the ratio of NPL/NPF, ROA, CAR, LDR/FDR and BOPO. The sample in this study consisted of 10 Islamic banks and 10 conventional banks with the largest assets. The sampling technique used is judgment sampling. The data used in this study are secondary data obtained from annual financial reports published by each bank. The data analysis technique used in this study is the Independent t Test/Mann Whitney U Test. The results showed that there are differences between conventional banks and Islamic banks measured by ROA and BOPO ratios. Meanwhile, there is no difference between conventional banks and Islamic banks measured by the ratio of NPL/NPF, CAR and LDR/FDR.