Capturing Islamic bank performance in Indonesia during the COVID-19 crisis: RGEC and SCNP approaches
-
Author(s)Fauzul Hanif Noor AthiefLink to ORCID Index: https://orcid.org/0000-0002-4784-904X
,
Rafiq Ahmad Zaky
,
Rheyza VirgiawanLink to ORCID Index: https://orcid.org/0000-0002-9016-0504
,
Muhammad Anwar FathoniLink to ORCID Index: https://orcid.org/0000-0002-7056-4229
,
Azidni RofiqoLink to ORCID Index: https://orcid.org/0000-0001-8717-0173
-
DOIhttp://dx.doi.org/10.21511/bbs.19(2).2024.02
-
Article InfoVolume 19 2024, Issue #2, pp. 15-29
- Cited by
- 473 Views
-
161 Downloads
This work is licensed under a
Creative Commons Attribution 4.0 International License
While adhering to the unique principle of Islamic value, Islamic banks are subject to any occurring crisis, just like other banks in common. After the end of the COVID-19 crisis, it is important to determine whether Islamic banking can demonstrate its resilience based on the unique values it upholds. Therefore, the primary objective of this study is to capture how Islamic banks performed during the unprecedented challenge posed by COVID-19. By utilizing the data generated from financial reports, this study employs the RGEC (Risk Profile, Good Corporate Governance, Earnings, and Capital) method that was introduced by Indonesia Central Bank and SCnP (Sharia Conformity and Profitability) measurement. The findings show that by utilizing RGEC, the study classifies Islamic banks into tiers of health, distinguishing 7 as very healthy, 5 as healthy, and 2 as fairly healthy. Meanwhile, SCnP sheds light on the balance between Sharia conformity and profitability, highlighting 2 Islamic banks with commendable equilibrium, 5 displaying a tilt towards high profitability and low conformity, 4 with a tendency towards Shariah conformity with low profitability, and 3 struggling with challenges in both aspects. The study concludes the overall financial resilience of the majority of Islamic banks in Indonesia during the pandemic while noting that some banks faced challenges in achieving a harmonious balance between profitability and Sharia conformity.
- Keywords
-
JEL Classification (Paper profile tab)G21, G33, E44
-
References54
-
Tables6
-
Figures2
-
- Figure 1. SCnP quadrant
- Figure 2. Projection of SCnP quadrant
-
- Table 1. Range of the composite index in RGEC
- Table 2. RGEC indicators and score calculations
- Table 3. Indicators and measurement of SCnP
- Table 4. Results of calculating SCnP indicators
- Table A1. Results of calculating RGEC indicators
- Table B1. Final result of RGEC calculation
-
- Abdullah, A. (2020). Measuring Islamic Bank’s Performance Using CAMELS and RGEC Method Based on Indonesian Financial Services Authority Circular. Journal of Business and Management Review, 1(4), 248-258.
- Aebi, V., Sabato, G., & Schmid, M. (2012). Risk management, corporate governance, and bank performance in the financial crisis. Journal of Banking & Finance, 36(12), 3213-3226.
- Anshori, A. G. (2008). The History of the Development of Islamic Banking Law in Indonesia and Its Implications for National Banking Practices. La_Riba, 2(2), 159-172.
- Athief, F. H. N., Ma’ruf, A., & Zakiy, F. S. (2023). Surviving Amidst Pandemic: Indonesian Islamic Microfinance Experience. International Journal of Advanced and Applied Sciences, 10(3), 119-129.
- Athief, F., & Ma’ruf, A. (2023). Tracing the asymmetry of religiosity-based loyalty of Islamic bank depositors. Banks and Bank Systems, 18(1), 1-13.
- Azizah, R. N., & Widyananto, A. (2022). Financial Analysis of BPRS Al-Salaam Amal Salman with Sharia Conformity and Profitability (SCnP) Model and Dupont System Technique. Maslahah (Jurnal Hukum Islam dan Perbankan Syariah), 13(1), 87-104.
- Bank Indonesia. (2011). Circular Letter of Bank Indonesia No. 13/24/DPNP dated October 25, 2011.
- Cakhyaneu, A., Mahri, A. J. W., & Sintia, I. (2023, June). Analysis of Islamic Bank Financial Performance in Asia: Sharia Conformity and Profitability (SCnP) Approach. In 4th International Conference on Islamic Economics, Business, Philanthropy, and PhD Colloqium (ICIEBP 2022) (pp. 207-217). Atlantis Press.
- Damayanti, C. R., Saifun, M. S., & Hikmah, M. (2020, November). RGEC Bank’s Performance and Value. In 2nd Annual International Conference on Business and Public Administration (AICoBPA 2019) (pp. 215-218). Atlantis Press.
- Desky, H., & Iskandar, I. (2020, February). The Analysis of behavioral Intention of Customers on the Conversion of Bank Aceh. In Proceedings of the 19th Annual International Conference on Islamic Studies, AICIS 2019, 1-4 October 2019, Jakarta, Indonesia.
- Diana, S., Sulastiningsih, S., & Purwati, P. (2021). Financial Performance Analysis of Islamic Banking in Indonesia During the Covid-19 Pandemic. Jurnal Riset Akuntansi Dan Bisnis Indonesia, 1(1), 111-125.
- Enyi, P. E. (2022). Corporate Financial Stability: An Immutable Link between Going Concern and Earning Capacity of Firms. Current Aspects in Business, Economics and Finance, 6, 88-106.
- Fajri, M. Z. N., Muhammad, A. A., Umam, K., Putri, L. P., & Ramadhan, M. A. (2022). The effect COVID-19 and sectoral financing on Islamic bank profitability in Indonesia. Journal of Islamic Economic Laws, 5(1), 38-60.
- Fitriani, P. D. (2020). Analisis Komparatif Kinerja Keuangan Bank Umum Syariah Pada Masa Pandemi Covid-19 [Comparative Analysis of the Financial Performance of Islamic Commercial Banks During the Covid-19 Pandemic]. Jurnal Ilmu Akuntansi dan Bisnis Syariah, 2(2), 113-124. (In Indonesian).
- Haider, M. A., Raza, Q., Jameel, S., & Pervaiz, K. (2019). A comparative study of operational efficiency of Pakistani and Malaysian Islamic banks: Data envelopment analysis approach. Asian Economic and Financial Review, 9(5), 559-580.
- Hendrich, M., Irsan, Masnoni, Handoko, D. T., & Fadilah, F. (2022). Analisis Perbandingan Kinerja Keuangan Pada Bank Syariah Bukopin Dan Bank Victoria Syariah Periode 2015–2019 [Financial Performance Comparison Analysis of Bank Syariah Bukopin and Bank Victoria Syariah for the Period 2015–2019]. Jurnal Ekobis Kajian Ekonomi dan Bisnis, 5(2), 51-66. (In Indonesian).
- Hidayat, R., Umam, R., & Tripalupi, R. I. (2021). Financial Performance of Islamic Banking During the Covid-19 Period and Its Enhancement Strategies. Finansha: Journal of Sharia Financial Management, 2(2), 77-91. (In Indonesian).
- Ihsan, D. N., & Hosen, M. N. (2021). Performance Bank BNI Syariah Di Masa Pandemi Covid-19 [The Performance of BNI Sharia Bank During the Covid-19 Pandemic]. Jurnal Ilmiah Ekonomi Islam, 7(2), 756-770. (In Indonesian).
- Ilhami, & Thamrin, H. (2021). Analisis Dampak Covid 19 Terhadap Kinerja Keuangan Perbankan Syariah Di Indonesia [Analysis of the Impact of Covid-19 on the Financial Performance of Islamic Banking in Indonesia]. Jurnal Tabarru’: Islamic Banking and Finance, 4(1), 37-45. (In Indonesian).
- Indira, N. C. (2021). Analisis Tingkat Kesehatan Bank Umum Syariah Di Masa Pandemi Covid-19 Menggunakan Metode Camel (Studi Kasus Bank Muamalat Indonesia dan Bank Syariah Mandiri)[Analysis of the Health Level of Islamic Commercial Banks During the Covid-19 Pandemic Using the CAMEL Method (Case Study of Bank Muamalat Indonesia and Bank Syariah Mandiri)] (Undergraduate Thesis). Universitas Islam Negeri Sumatera Utara. (In Indonesian).
- Javaid, S., & Alalawi, S. (2018). Performance and profitability of Islamic banks in Saudi Arabia: An empirical analysis. Asian Economic and Financial Review, 8(1), 38-51.
- Kartika, I., Kiryanto, K., & Cahyaningtyas, R. N. (2022). Maqasid Sharia-Based Performance Improvement Model: A Case Study in Islamic Banks in Indonesia. IJIBE (International Journal of Islamic Business Ethics), 7(1), 16-29.
- Kartika, R., Jubaedah, S., & Astuti, A. D. (2020). The influence of financing to deposit ratio, return on assets and non performing finance on profit sharing finance of sharia banks in Indonesia. In 1st International Conference on Accounting, Management and Entrepreneurship (ICAMER 2019) (pp. 136-140). Atlantis Press.
- Khalil, M., & Fuadi, R. (2016). Analisis Penggunaan Metode Risk Profile, Good Corporate Governance, Earning, And Capital (Rgec) Dalam Mengukur Kesehatan Bank Pada Bankumum Syariah Di Indonesia Periode 2012–2014 [Analysis of the Use of the Risk Profile, Good Corporate Governance, Earning, and Capital Methods in Measuring the Health of Sharia Commercial Banks in Indonesia During the Period 2012–2014]. Jimeka, 1(1), 20-35. (In Indonesian).
- Kuppusamy, M., Saleh, A. S., & Samudhram, A. (2010). Measurement of Islamic banks performance using a shariah conformity and profitability model. Review of Islamic Economics, 13(2), 35-48.
- Kusumastuti, W. I., & Alam, A. (2019). Analysis of impact of CAR, NPF, BOPO on profitability of Islamic banks (Year 2015–2017). Journal of Islamic Economic Laws, 2(1), 30-59.
- Lantara, D., Junaidi, J., Rauf, N., Pawenari, A., & Achmad, R. N. (2022). Indonesian Islamic banks: A review of the financial state before and after the COVID-19 pandemic. Banks and Bank Systems, 17(4), 12-24.
- Lasta, H. A., Arifin, Z., & Nuzula, N. F. (2014). Analisis Tingkat Kesehatan Bank Dengan Menggunakan Pendekatan RGEC (Risk Profile, Good Corporate Governance, Earnings, Capital) (Studi pada PT. Bank Rakyat Indonesia, Tbk Periode 2011-2013) [Analysis of Bank Healthiness using RGEC (Risk Profile, Good Corporate Governance, Earnings, Capital) Case Study of PT. Bank Rakyat Indonesia 2011-2013]. Jurnal Administrasi Bisnis, 13(2). (In Indonesian).
- Maharani, S. N., Rahmawati, S. A., Syihhabudin, S., & Sin, L. G. (2020). Reconstruction of Islamic Banking Performance Measurement Models: A Critical Thought. Utopía y Praxis Latinoamericana, 25(1), 155-165.
- Muhammad, R., & Nawawi, M. (2022). Kinerja Keuangan Bank Syariah di Indonesia Sebelum dan Selama Pandemi Covid-19 [Financial Performance of Islamic Banks in Indonesia Before and During the Covid-19 Pandemic]. El-Mal: Jurnal Kajian Ekonomi & Bisnis Islam, 3(5), 854-867. (In Indonesian).
- Mulazid, A. S. (2016). Pelaksanaan Sharia Compliance Pada Bank Syariah (Studi Kasus Pada Bank Syariah Mandiri, Jakarta) [Implementation of Sharia Compliance in Islamic Banks (A Case Study on Bank Syariah Mandiri at Jakarta)]. Madania, 20(1), 37-54. (In Indonesian).
- Muthoifin, M. (2021). The performance of sharia financing amid the COVID-19 pandemic in Indonesia. Universal Journal of Accounting and Finance, 9(4), 757-763.
- Nofinawati, N. (2016). Perkembangan Perbankan Syariah di Indonesia [The Development of Islamic Banking in Indonesia]. Juris, 14(2), 168-183. (In Indonesian).
- Nugroho, L., Nugraha, E., Badawi, A., & Putra, Y. M. (2021). Comparative Analysis of The Effect of Loan/Financing To Deposit Ratio, Labor Costs Growth and Promotion Costs Growth to Returns on Assets in Islamic Banks and Conventional Banks in Indonesia. International Journal of Commerce and Finance, 7(2), 21-49. (In Indonesian).
- Nurdzanah, R., Syarifudin, E., & Jajuli, S. (2022). Perbandingan Efisiensi Kinerja Bank Umum Syariah dan Unit Usaha Syariah Pada Masa Pandemi Covid-19 (Periode 2019-2021) [Comparison of the Efficiency of Performance between Islamic Commercial Banks and Sharia Business Units During the Covid-19 Pandemic (2019-2021)]. Tsarwah, 7(1), 49-56. (In Indonesian).
- Nurhadi, N. (2019). Subhat income of Sharia financial institutions according to dual law (formal and Sharia law). AHKAM: Jurnal Ilmu Syariah, 19(2), 411-428.
- Peni, E., & Vähämaa, S. (2012). Did good corporate governance improve bank performance during the financial crisis? Journal of Financial Services Research, 41, 19-35.
- Permana, B. A. (2012). Analisis tingkat kesehatan bank berdasarkan metode CAMELS dan metode RGEC [Bank health level analysis based on the CAMELS method and RGEC method]. Jurnal Akuntansi Akunesa, 1(1), 1-21. (In Indonesian).
- Pramana, A. P., & Yunita, I. (2017). Pengaruh Rasio-Rasio Risk-Based Bank Rating (Rbbr) Terhadap Peringkat Obligasi [The Influence of Risk-Based Bank Rating (RBBR) Ratios on Bond Ratings]. Jurnal Manajemen Indonesia, 15(1), 65. (In Indonesian).
- Prasetyowati, L. A., & Handoko, L. H. (2016). Pengukuran kinerja bank umum syariah dengan maqasid index dan sharia conformity and profitability (SCnP) [Sharia commercial bank performance is measured using the maqasid index and sharia conformity and profitability (SCnP)]. Jurnal Akuntansi Dan Keuangan Islam, 4(2), 107-130. (In Indonesian).
- Ratnaputri, W. (2013). The analysis of Islamic bank financial performance by using CAMEL, Shariah conformity and profitability (SCnP). JDM (Jurnal Dinamika Manajemen), 4(2).
- Rohman, A., Nurkhin, A., Mukhibad, H., & Kusumantoro, W. (2022). Determinants of Indonesian banking profitability: Before and during the COVID-19 pandemic analysis. Banks and Bank Systems, 17(2), 37-46.
- Sanjaya, R. A., Suripto, & Harori, M. I. (2022). Comparison of Financial Performance of Conventional Banking and Sharia Banking Using Camel Analysis During the Covid-19. Jurnal Kompetitif Bisnis, 1(September), 531-543.
- Sari, Y. I. P., & Lestari, W. D. (2022, June). Analysis of Bank Health Level Using RGEC (Risk Profile, Good Corporate Governance, Earnings, and Capital) Method. In International Conference on Economics and Business Studies (ICOEBS 2022) (pp. 321-326). Atlantis Press.
- Sholihah, E. (2021). Efisiensi Kinerja Keuangan Sektor Perbankan Indonesia Di Masa Pandemi Covid-19 [Efficiency of Financial Performance in the Banking Sector of Indonesia During the Covid-19 Pandemic]. JRMSI – Jurnal Riset Manajemen Sains Indonesia, 12(2), 287-304. (In Indonesian).
- Siregar, S., & Shifa, M. (2021). Analysis of Financial Performance Measurement Sharia Bank Using RGEC and SCnp (Shariah Conformity and Profitability) Model. Journal Research Of Social Science, Economics, aAnd Management, 1(5), 523-544.
- Sobol, I., Dopierała, Ł., & Wysiński, P. (2023). Is the profitability of Islamic and conventional banks driven by the same factors? A study of banking in the Middle East. Plos One, 18(8), e0289264.
- Sullivan, V. S., & Widoatmodjo, S. (2021). Kinerja Keuangan Bank Sebelum Dan Selama Pandemi (COVID – 19) [Financial Performance of Banks Before and During the COVID-19 Pandemic]. Jurnal Manajerial Dan Kewirausahaan, 3(1), 257. (In Indonesian).
- Surya, Y. A., & Asiyah, B. N. (2020). Analisis Perbandingan Kinerja Keuangan Bank Bni Syariah Dan Bank Syariah Mandiri Di Masa Pandemi Covid-19 [Comparative Analysis of the Financial Performance of BNI Syariah and Bank Syariah Mandiri During the Covid-19 Pandemic]. Iqtishadia Jurnal Ekonomi & Perbankan Syariah, 7(2), 170-187. (In Indonesian).
- Sutrisno, & Widarjono, A. (2018). Maqasid sharia index, banking risk and performance cases in Indonesian Islamic banks. Asian Economic and Financial Review, 8(9), 1175-1184.
- Syahputra, F. D. (2022). Analisis Kinerja Keuangan Bank Umum Syariah pada Masa Pandemi Covid-19 Menggunakan Metode Camel (Capital, Asset Quality, Management, Earnings, Liquidity) [ Financial Performance Analysis of Islamic Commercial Banks During the Covid-19 Pandemic Using the CAMEL Method] (Undergraduate Thesis). Universitas Islam Malang. (In Indonesian).
- Utama, A. S. (2018). Sejarah dan Perkembangan Regulasi Mengenai Perbankan Syariah Dalam Sistem Hukum Nasional Di Indonesia [History and Development of Regulations Regarding Islamic Banking in the National Legal System of Indonesia]. Jurnal Wawasan Yuridika, 2(2), 187. (In Indonesian).
- Wijaya, I. F., Sugiarto, C., Nofandrilla, N., & Sukmajati, A. (2023). Religiosity and depositor funds: evidence from Islamic banks in Indonesia. Journal of Financial Services Marketing, 1-15.
- Zaheer, S., & Farooq, M. (2014, January). Liquidity crisis: are Islamic banking institutions more resilient. In IMF conference on Macroeconomic Challenges Facing Low-Income Countries. Washington, DC.
-
The impact of COVID-19 on the transportation and logistics industry
Dalia Perkumiene ,
Agbonmere Osamede ,
Regina Andriukaitienė ,
Olegas Beriozovas
doi: http://dx.doi.org/10.21511/ppm.19(4).2021.37
Problems and Perspectives in Management Volume 19, 2021 Issue #4 pp. 458-469 Views: 6449 Downloads: 10177 TO CITE АНОТАЦІЯIn this present age of globalization, the logistics and transportation industry has become an integral part of most businesses/firms as it is aimed at ensuring the effective movement of people, distribution of goods and services from one location to another on time. Therefore, this paper aims to analyze the impact of COVID-19 on the logistics and transportation sectors. The qualitative research approach was adopted using analysis and synthesis of scientific literature, data from news reports, organizational sites, and a case study of data contents. The paper presented the analysis of negative and positive effects of COVID-19 on the logistics and transportation industry. The study also discusses possible strategies and further steps for improvement of the logistics and transportation sector, including the automation and introduction of other technologies, a sustainable and flexible transportation system, cooperation of logistics and transportation business. Findings regarding the positive implications of COVID-19 show noticeable advancements in the logistics and transportation sector, such as the rise of e-commerce businesses with efficient delivery options, and the development of 3rd party logistics services as more companies outsource supply chain operations. The study revealed the importance of strategic planning with a joint effort from the research centers, public sector, private sector, and educational institutions as one of the proposed solutions for the logistics and transportation industry.
-
The impact of social distancing policy on small and medium-sized enterprises (SMEs) in Indonesia
Muhtar Lutfi ,
Pricylia Chintya Dewi Buntuang ,
Yoberth Kornelius ,
Erdiyansyah ,
Bakri Hasanuddin
doi: http://dx.doi.org/10.21511/ppm.18(3).2020.40
Problems and Perspectives in Management Volume 18, 2020 Issue #3 pp. 492-503 Views: 3786 Downloads: 1360 TO CITE АНОТАЦІЯThis study aims to investigate the impact of social distancing policies on SMEs in Indonesia. It used a quantitative method with a survey design. Respondents were all SMEs in Indonesia that are affected by social distancing policies during the COVID-19 pandemic. It involved a total of 587 SME samples selected randomly. The data were collected through observations, questionnaires, and literature studies. The collected data were analyzed using descriptive statistics with SPSS software to determine the mean value. The result showed that social distancing policies affect SMEs during the COVID-19 pandemic. This is indicated by the decreasing income and demand for SMEs products, and even some have no income (mean values of 2.40) due to the social distancing policies. Besides, the policy’s impact is also shown in the increasing cost of raw materials and production costs due to supply chain problems (mean values of 4.79). The policy’s impact raises anxiety for SMEs to survive so that business actors change their plans by utilizing information technology (mean values of 4.81). This change is a strategy to survive due to the impact of the applied policies. Although social distancing policies affect SMEs’ survival during the pandemic, research findings show that SMEs in Indonesia did not terminate employment (mean values of 4.37) due to the presence of economic stimulus policies that helped SMEs survive and grow during the COVID-19 pandemic.
-
Positive contribution of the good corporate governance rating to stability and performance: evidence from Indonesia
RR. Iramani , Muazaroh Muazaroh , Abdul Mongid
doi: http://dx.doi.org/10.21511/ppm.16(2).2018.01
Problems and Perspectives in Management Volume 16, 2018 Issue #2 pp. 1-11 Views: 3155 Downloads: 308 TO CITE АНОТАЦІЯThis paper aims to examine the impact of Good Corporate Governance (GCG) practice on bank stability and performance. Governance is measured using the GCG rating that covers eleven aspects. The authors apply instrumental regression to link governance to performance and stability. The study covers a sample of 150 banks. The result shows that bank stability can mediate bank governance and bank performance. On the determinant of bank performance, it can be concluded that the GCG rating is positive and directly influences bank performance. Bank stability is also positive for bank performance indicating the indirect contribution of the GCG rating to bank performance. NPL, LDR, CAR and bank’s size (LASSET) are all negative and significant. The aim of this paper is to provide strong empirical evidence on the importance of governance and stability for performance. The limitations of this paper are the size of the sample and that it only covers public banks which are theoretically required to apply better governance in all aspects of their business by the Capital Market Authority.
