Efficiency, stability and asset quality of Islamic vis-à-vis conventional banks: Evidence from Indonesia
Journal of Islamic Accounting and Business Research
ISSN: 1759-0817
Article publication date: 8 May 2018
Abstract
Purpose
This paper aims to examine how Indonesian Islamic banks differ from conventional banks in terms of their business model, asset quality, stability and efficiency.
Design/methodology/approach
Based on data from 2008 to 2012, the authors use t-test, z-score and data envelopment analysis (DEA) to assess the business model, as well as the asset quality, stability and efficiency of both the Islamic and conventional banks.
Findings
The results indicate that there are significant differences between the two – Islamic banks appear to not follow the conventional business model. Secondly, Islamic banks seem to have better asset quality and to be more stable than their conventional counterparts.
Originality/value
Finally, the DEA results also indicate that Islamic banks are relatively more efficient than conventional banks, as shown by their higher overall efficiency, as well as technical efficiency.
Keywords
Citation
Prima Sakti, M.R. and Mohamad, A. (2018), "Efficiency, stability and asset quality of Islamic
Publisher
:Emerald Publishing Limited
Copyright © 2018, Emerald Publishing Limited