ANALYSIS OF ISLAMIC BANK FINANCIAL PERFORMANCE IN ASIA: SHARIA CONFORMITY AND PROFITABILITY (SCnP) APPROACH Aneu Cakhyaneu (a*), A.Jajang W. Mahri (a), Ira Sintia (a)
a) Universitas Pendidikan Indonesia, Jl. Dr. Setiabudhi No. 229 Bandung
*aneufpeb[at]upi.edu
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 per-formance 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 commer-cial banks in Asia. The financial performance of islamic banks is measured by two approach-es 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 conformi-ty score. As for the profitability approach, the average of islamic banks in Asia showed a fair-ly 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 implica-tion 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.
Keywords: Financial Performance, Sharia Conformity and Profitability (SCnP), Profit Sharing Ratio, Islamic Invesment Ratio, Islamic Income Ratio, Return on Asset, Return on Equity, Net Profit Margin
Topic: Islamic accounting, auditing, and performance changes
