Analysis of the Financial Performance Comparison Between Islamic Banks and Conventional Banks Listed on the Indonesia Stock Exchange for the Period 2014 - 2018

Abstract

In Indonesia, there are two types of commercial banks: conventional banks and Islamic
banks. This study aims to compare the financial performance of conventional banks with
Islamic banks for the period 2014-2018 listed on the Indonesia Stock Exchange (IDX). The
parameters used to compare banking financial performance involve financial ratios using
the REC (Risk Profile, Earnings, Capital) analysis method, which includes five financial
ratios: NPL/NPF, LDR/FDR, ROA, BOPO, and CAR. The population of this study
comprises 45 conventional banks and 6 Islamic banks listed on the IDX. The sampling was
conducted using purposive sampling, resulting in a sample of 3 Islamic banks represented
by Bank Rakyat Indonesia (BRI) Syariah, Bank Negara Indonesia (BNI) Syariah, and Bank
Mandiri Syariah, and 3 conventional banks represented by Bank Rakyat Indonesia (BRI),
Bank Negara Indonesia (BNI), and Bank Mandiri. The data used in this study were obtained
from annual financial reports published by each of the banks studied. The data analysis
technique used is the Independent Sample t-test. The results of this study indicate that there
are significant differences between conventional banks and Islamic banks in terms of NPL,
LDR, ROA, BOPO, and CAR ratios. Conventional banks perform better in terms of NPL,
ROA, BOPO, and CAR ratios, while Islamic banks perform better in terms of the LDR
ratio.