Analysis of Islamic Bank Financial Performance in Asia: Sharia Conformity and Profitability (SCnP) Approach

DOI

10.2991/978-94-6463-176-0_14How to use a DOI?

Keywords

Financial Performance; Sharia Conformity and Profitability (SCnP); Profit Sharing Ratio; Islamic Income Ratio; Return on Asset

Abstract

The performance of Islamic banks in Asia in 2020 experienced fluctuating from the previous year, which was allegedly due to the arrival of the Covid 19 outbreak that occurred in the first quarter of 2020 which hit all countries in the world. This study aims to describe how the performance of islamic banks in Asia based on the Sharia Conformity and Profitability (SCnP) approach in 2016–2020. The research method used is descriptive quantitative with panel data analysis while the sampling technique is purposive sampling as many as 10 islamic commercial banks in Asia. The financial performance of islamic banks is measured by two approaches namely sharia conformity (profit sharing ratio, islamic invesment ratio, islamic income ratio) and profitability measures (return on asset, return on equity, net profit margin). The results of research based on sharia conformity show that the average islamic banks in Asia have the good performance with Bank Meezan Pakistan having the highest sharia conformity score. As for the profitability approach, the average of islamic banks in Asia showed a fairly good performance with the highest profitability score at Brunei Islamic Bank on period 2016–2020. Based on the calculation of sharia conformity and profitability, the average of islamic banks in Asia is in the upper right quadran category. This indicates that islamic banks have good performance with a high level of sharia compliance and profitability. The implication of this research is that islamic banks must be able to maintance a balance between the achievement of sharia goals and the level of profitability so that in carrying out its business activities banks dot not only gain profits in the world but also the blessings of achieving the goals of sharia eventually they bring fallah for others.

Copyright

© 2023 The Author(s)

Open Access

Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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TY  - CONF
AU  - Aneu Cakhyaneu
AU  - A. Jajang W. Mahri
AU  - Ira Sintia
PY  - 2023
DA  - 2023/06/19
TI  - Analysis of Islamic Bank Financial Performance in Asia: Sharia Conformity and Profitability (SCnP) Approach
BT  - Proceedings of the 4th International Conference on Islamic Economics, Business, Philanthropy, and PhD Colloqium (ICIEBP 2022)
PB  - Atlantis Press
SP  - 207
EP  - 217
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6463-176-0_14
DO  - 10.2991/978-94-6463-176-0_14
ID  - Cakhyaneu2023
ER  -