COMPOSITE SET OF FINANCIAL INDICATOR OF ISLAMIC

COMERCIAL BANKING WITH SHARIA COMPLIANCE AND

PERFORMANCE BASE

Rais Sani Muharrami, M.E.I.

Background
For recent years, studies in Islamic banking performance greatly concern on the
financial aspect of sharia. Hence, Islamic banking is required to consistently evaluate
their performances by referring to the real concept of Islamic banking. The present
study, therefore, intends to know the performance of Islamic commercial banking both
in terms of financial performance and Islamic complience.

To maintain public trust, the banking regulators, which at that time was still being
carried out by Bank Indonesia (BI), arranged banks to be trusted by the public through
Bank Indonesia Regulation No. 13/1 / PBI / 2011 and SE BI No. 13/24 / DPNP, which
took effect in January 2012, replaced the old method of financial performance using
the CAMELS method with the RBBR method. the CAMELS method is declared no
longer valid, replaced by a new model that requires the Commercial Bank to conduct a
self-assessment of the Bank's Soundness Level using a Risk-Based Bank Rating
(RBBR) approach both individually or on a consolidated basis. The RBBR method
uses 4 bank health measures. Namely risk profile, Good Corporate Governance,
Earning and Capital. This method makes risk weighting the main indicator in
determining the soundness of a bank.
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Mohammed & Razak (2008) in his research conducted a bank health assessment
using the maqasid framework. There are three variables that are used as a measure
of sharia bank health, namely education, fairness and maslahah variable (public
interest). Antonio et al. (2012) adopted the research of Mohammed & Razak (2008)
conducted a study measuring the performance of Islamic banks by giving the name
Maqasid Index. The research variable still refers to the research of Mohammed &
Razak (2008).

The bank's health assessment by including sharia objectives (maqasid syariah) was
also conducted by Kuppusamy et al. (2010). Kuppusamy et al. (2010) using sharia
conformity and profitability variables. Sharia suitability variables are measured by
Islamic investment ratio, Islamic income ratio, and profit sharing ratio. While
profitability is measured by return on assets, return on equity, and profit margins on
profit. Kuspusamy et al. (2010) grouping Islamic banks into four quadrants. The first
quadrant of Islamic banks with high profitability with high Islamic compatibility, the
second quadrant of high profitability but low Islamic compatibility, the third quadrant of
low profitability with high Islamic compatibility, and the fourth quadrant of low
profitability with low Islamic compatibility.

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Therefore it is necessary to have an instrument for measuring the performance of
Islamic banks that incorporate elements of sharia and elements of financial
performance based on the assessment of the RBBR model. To bridge the lack of a
balance between financial performance and sharia compliance, the researcher will
conduct a scientific study on the measurement of sharia bank performance using the
sharia complience and performance model by Sutrisno (2017).

Sharia compliance and performance are utilized as the methods of gathering data in
this study. While the sharia compliance is determined by personal education, profit
sharing ratio, zakat ratio, and Islamic investment, and the financial performance is
considered by using RBBR RGEC (Risk, GCG, Earning and Capital).

From the background description, previous research, and theoretical study, the
purpose of this study is to determine the performance of Islamic banks in terms of
financial performance as measured by RBBR which is a measurement of financial
performance based on PBI No. 13/1 / PBI / 2011 and to determine the performance of
Islamic banking with the Sharia Complience and Performance model approach.

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Methode
This research will use the entire population 12 of Islamic Commercial Banks in
Indonesia. There are 2 variables used in this study, namely the financial variable and
the Shariah compliance variable. Financial variables are calculated based on RBBR
ratios and Shariah compliance is calculated based on personal education, profit
sharing, zakah ratio and Islamic investment. The variables and measurements can be
seen in the following table:

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The analytical tool in this study uses descriptive analysis method. Calculation of
financial and sharia compliance is calculated quantitatively. Furthermore, the
calculation results will be ranked according to the quantitative analysis results and
then included in the SCnP matrix. All quantitative analysis results will be described to
explain the phenomena found in this study.

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Result
Financial Performance
The object of this research is the Sharia Commercial Bank namely PT. Bank
Muamalat Indonesia (BMI), PT. Bank Syariah Bukopin (BSB), PT. Bank Jabar Banten
Syariah (BJBS), PT. Bank Victoria Syariah (BVS), PT. Bank Mega Syariah (BMS), PT.
Bank Panin Dubai Syariah (BPDS), PT. BCA Syariah (BCAS), PT. Bank Syariah
Mandiri (BSM), PT. BNI Syariah (BNIS), PT. Bank Tabungan Pensiunan Nasional
Syariah (BTPNS), PT. Maybank Syariah Indonesia (MSI) and PT. BRI Syariah (BRIS).
The research period taken is the range of 2015 to 2017 using the annual report as
secondary data that is processed.
Instrument data that is processed is RBBR data as regulated by OJK through 8 /
POJK.03 / 2014, or what we commonly call RGEC. The instruments are Risk profile,
Good Corporate Governance, Earning and Capital.
1. Risk Profile
The risk profile calculation is based on the ratio of FDR and NPF. The FDR and NPF
data from each bank are processed then assessed based on data from Islamic bank
financial statements. The data we have obtained are as follows

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 NPF Predicate of Islamic Commercial Bank of 2015-2017 Period
NPF
No Bank
2015 2016 2017 Average
1 BMS 4,26 3,30 2,95 3,5
Predikat Good Good Good Good
2 BMI 4,20 1,40 2,75 2,78
Predikat Good Excellent Good Good
3 BSM 4,05 3,13 2,71 3,30
Predikat Good Good Good Good
4 BVS 4,82 4,35 4,08 4,42
Predikat Good Good Good Good
5 BCAS 0,5 0,2 0,04 0,25
Predikat Excellent Excellent Excellent Excellent
6 BJBS 6,93 17,91 2,84 9,23
Predikat Acceptable Very Bad Good Bad
7 BNIS 1,46 1,64 1,50 1,53
Predikat Excellent Excellent Excellent Excellent
8 BRIS 3,89 3,19 4,72 3,93
Predikat Good Good Good Good
9 BSB 2,74 4,66 4,18 3,86
Predikat Good Good Good Good
10 MSI 4,93 4,60 0,00 3,18
Predikat Good Good Excellent Good
11 BPDS 1,94 1,86 4,83 2,88
Predikat Excellent Excellent Good Good
12 BTPNS 0,2 0,2 0,1 0,17
Predikat Excellent Excellent Excellent Excellent

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 FDR Predicate of Islamic Commercial Bank of 2015-2017 Period
FDR
No Bank
2015 2016 2017 Average
1 BMS 98,49 95,24 91,05 94,93
Predicate Acceptable Acceptable Acceptable Acceptable
2 BMI 90,30 95,13 84,41 89,95
Predicate Acceptable Acceptable Good Acceptable
3 BSM 81,99 79,19 77,66 79,61
Predicate Good Good Good Good
4 BVS 95,29 100,67 83,59 93,18
Predicate Acceptable Bad Good Acceptable
5 BCAS 91,4 90,1 88,5 90
Predicate Acceptable Acceptable Acceptable Acceptable
6 BJBS 104,75 98,73 91,03 98,17
Predicate Bad Acceptable Acceptable Acceptable
7 BNIS 91,94 84,57 80,21 85,57
Predicate Acceptable Good Good Acceptable
8 BRIS 84,16 81,47 71,81 79,15
Predicate Good Good Excellent Good
9 BSB 90,56 88,18 82,44 87,06
Predicate Acceptable Acceptable Good Acceptable
10 MSI 110,54 134,73 85,94 110,4
Predicate Bad Very Bad Acceptable Bad
11 BPDS 96,43 91,99 86,95 91,79
Predicate Acceptable Acceptable Acceptable Acceptable
12 BTPNS 96,5 92,8 92,5 93,93
Predicate Acceptable Acceptable Acceptable Acceptable

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2. Good Corporate Governance

Good Corporate Governance is good governance of a bank which is shown from the
magnitude of the composite value obtained from the results of self-assessment of
each bank. This assessment of Good Corporate Governance factors aims to find out
the quality of the implementation of good governance of a bank in a certain period of
time in accordance with OJK regulations. The smaller the composite value obtained,
the better the application of governance at the relevant bank.
Most of the GCG reporting conducted by Islamic banking is reported descriptively.
Whereas in this study, almost all data analyzed using quantitative data, so
researchers ignored the GCG indicators in the financial analysis research of Islamic
banks.

3. Earning
The earnings factor can be obtained by comparing earnings to average total assets
(ROA) or also by comparing operational costs incurred by banks with operating
income earned by banks (BOPO). In this study, researchers used the ROA ratio as an
indicator of profitability assessment.

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 ROA Predicate of Islamic Commercial Bank of 2015-2017 Period
ROA
No Bank
2015 2016 2017 Average
1 BMS 0,30 2,63 1,56 1,49
Predicate Bad Excellent Excellent Good
2 BMI 0,20 0,22 0,11 0,17
Predicate Bad Bad Bad Bad
3 BSM 0,56 0,59 0,59 0,58
Predicate Acceptable Acceptable Acceptable Acceptable
4 BVS -2,36 -2,19 0,36 -1,39
Predicate Very Bad Very Bad Bad Very bad
5 BCAS 1,0 1,1 1,2 1,1
Predicate Acceptable Acceptable Acceptable Acceptable
6 BJBS 0,25 -8,09 -5,69 -4,51
Predicate Bad Very bad Very Bad Very Bad
7 BNIS 1,43 1,44 1,31 1,39
Predicate Good Good Good Good
8 BRIS 0,77 0,95 0,51 0,74
Predicate Acceptable Acceptable Acceptable Acceptable
9 BSB 0,79 -1,12 0,02 -0,10
Predicate Acceptable Very bad Bad Very Bad
10 MSI -20,13 -9,51 5,50 -8,05
Predicate Very Bad Very Bad Excellent Very Bad
11 BPDS 1,14 0,37 -10,77 -3,09
Predicate Acceptable Bad Very Bad Very Bad
12 BTPNS 5,2 9,0 11,2 8,47
Predicate Excellent Excellent Excellent Excellent

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4. Capital
Assessment on capital factors (capital) is an assessment of the ability of banks in
business development and their ability to accommodate risks that may arise in each
bank's operational activities. The capital factor can be seen through the CAR (Capital
Adequacy Ratio) or KPMM (Kewajiban Penyediaan Modal Minimum). This ratio shows
the adequacy of bank capital in absorbing losses and meeting applicable CAR
requirements. BI and OJK set a minimum limit of banking CAR is 8%.

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 CAR Predicate of Islamic Commercial Bank of 2015-2017 Period

CAR
No Nama Bank
2015 2016 2017 Rata-rata
1 BMS 18,74 23,53 22,19 21,47
Predicate Excellent Excellent Excellent Excellent
2 BMI 12,00 12,74 13,62 12,79
Predicate Good Excellent Excellent Excellent
3 BSM 12,85 14,01 15,89 14,25
Predicate Excellent Excellent Excellent Excellent
4 BVS 16,14 15,98 19,29 17,14
Predicate Excellent Excellent Excellent Excellent
5 BCAS 34,3 36,7 29,4 33,47
Predicate Excellent Excellent Excellent Excellent
6 BJBS 0,25 -8,09 -5,69 -4,51
Predicate Very Bad Very Bad Very Bad Very Bad
7 BNIS 15,48 14,92 20,14 16,85
Predicate Excellent Excellent Excellent Excellent
8 BRIS 13,94 20,63 20,29 18,29
Predicate Excellent Excellent Excellent Excellent
9 BSB 16,31 15,15 19,20 16,89
Predicate Excellent Excellent Excellent Excellent
10 MSI 38,40 55,06 75,83 56,43
Predicate Excellent Excellent Excellent Excellent
11 BPDS 20,30 18,17 11,51 16,66
Predicate Excellent Excellent Good Excellent
12 BTPNS 19,9 23,8 28,9 24,2
Predicate Excellent Excellent Excellent Excellent

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 RBBR Predicate
Average of
No Bank Ranking
NPF FDR GCG ROA CAR Predicate

1 BMS 2 3 - 2 1 2 6

2 BMI 2 3 - 4 1 2,5 7

3 BSM 2 2 - 3 1 2 5

4 BVS 2 3 - 5 1 2,75 8

5 BCAS 1 3 - 3 1 2 4

6 BJBS 4 3 - 5 5 4,25 12

7 BNIS 1 3 - 2 1 1,75 2

8 BRIS 2 2 - 3 1 2 3

9 BSB 2 3 - 5 1 2,75 9

10 MSI 2 4 - 5 1 3 11

11 BPDS 2 3 - 5 1 2,75 10

12 BTPNS 1 3 - 1 1 1,5 1

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Sharia Compliance
Sharia performance measurement consists of four variables namely personal
education, profit sharing ratio, zakat ratio, and Islamic investment. The basic
calculation uses the concept used by Mohammed & Razak (2008) and Antonio et al.
(2012), with adjustments to the variables used. Individual education is given a weight
of 30 points, profit sharing 40 points, zakat ratio of 10 and Islamic investment by 20
points.
Sharia Compliance of Islamic Commercial Bank of 2015-2017 Period

No Bank Personal Profit Sharing Ratio Islamic

Education Zakah Ratio Investment Total
1 BMS 5,63 5,27 3,41 98,57 112,88
2 BMI 2,68 52,68 4,62 24,74 84,72
3 BSM 0,0014 30,5 4,62 40,29 75,4114
4 BVS 1,68 73,04 0 97,11 171,83
5 BCAS 1,37 47,13 0 64,43 112,93
6 BJBS 5,97 4,49 0 0 10,46
7 BNIS 5,5 21,23 3,36 99,15 129,24
8 BRIS 1,57 36,89 1,9 98,45 138,81
9 BSB 2,42 53,86 0 46,71 102,99
10 MSI 6,22 18,57 0 99,65 124,44
11 BPDS 9,54 87,12 0,06 0 96,72
12 BTPNS 1,69 0,38 0,04 18,67 20,78

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Matriks of Islamic Comercial Banking with SCnp Models

After evaluating the financial performance and sharia compliance, we ranked all the
results. The following is a rating of Sharia Conference and Financial Performance of
Islamic banks:

Sharia Compliance and Performance Predicate of Islamic Commercial Bank of 2015-

2017 Period

Bank Sharia Compliance Financial Performance

BVS 1 8
BRIS 2 3
BNIS 3 2
MSI 4 11
BCAS 5 4
BMS 6 6
BSB 7 9
BPDS 8 10
BMI 9 7
BSM 10 5
BTPNS 11 1
BJBS 12 12

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Based on the ranking, the ranking results are included in the SCnP matrix Kupussamy
et al. (2010). In this matrix, there are 4 quadrants. The first quadrant shows good
sharia compliance with high financial performance. The second quadrant shows high
financial performance with weak sharia compliance. The third quadrant shows good
sharia compliance with low financial performance. The last quadrant shows weak
sharia compliance with low financial performance.

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Based on the matrix, it can be seen that there are 4 sharia commercial banks that are included in the category
of good sharia experience with high financial performance or Kudran 1. The four sharia commercial banks are
BNI Syariah, BRI Syariah, BCA Syariah and finally Mega Syariah Bank. The results in this first quadrant are
quite encouraging, considering that 2 Sharia Commercial Banks are BUMN subsidiaries, which means the
status of a subsidiary can be a consideration for the State to accelerate sharia banking acceleration nationally
by making one BUMN as full shariah banking. Interestingly enough, BCA Syariah, a subsidiary of foreign
banks, is also included in the quadrant 1 category.

The second quadrant is each occupied by 2 Sharia Commercial Banks. For the second quadrant there is
BTPN Syariah and Bank Syariah Mandiri. BTPN Syariah has been known as a sharia bank that is concerned
in MSME financing, this result proves that financing in the MSME sector is not a high risk thing if it is able to
be managed properly. This is also evidence that MSMEs have good prospects. The third quadrant is occupied
by Bank Victoria Syariah and Maybank Syariah.

The last quadrant showing the position of weak sharia compliance with low financial is occupied by 4 Islamic
commercial banks. The four Islamic banks are Muamalat Indonesia Bank, Bukopin Syariah Bank, Bank Panin
Dubay Syariah and BJB Syariah Bank. Among the four Islamic banks, there are 3 Islamic commercial banks
included in the pioneers of Islamic banks in each category. BMI is the first sharia bank in Indonesia, then
BPDS is the first sharia commercial bank to conduct listing on the sharia stock market, and Sharia BJB is a
subsidiary of a Regional Bank conducting sharia spin-offs. This fact is quite alarming and an evaluation of
each party.

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Conclusion
This research found that in terms of financial performance, the first rank was occupied by BTPN
Syariah, followed by BNI Syariah and BRI Syariah. BTPN Syariah has been known as a sharia bank
that is concerned in financing MSMEs, this result proves that financing in the MSME sector which
has been identified with sectors that have a high risk is indisputable. This is also evidence that
MSMEs have quite good prospects, this is evidenced by the highest profitability of BTPN Syariah
compared to other Islamic commercial banks..

In terms of sharia performance, the top positions are each occupied by Bank Victoria Syariah,
followed by BRI Syariah and BNI Syariah. This result is encouraging, considering Bank Victoria
Syariah is a subsidiary of a foreign bank that has the status of a Sharia Commercial Bank. However,
the results of a good sharia compliance is not accompanied by good financial performance. This is
evidenced by the position of Bank Victoria Syariah included in the third quadrant with high sharia
compliance with low financial performance.

In contrast to BTPN Syariah which has conflicting results between financial performance and sharia
compliance. BRI Syariah and BNI Syariah each have equally high results for the assessment of
sharia compliance and financial performance. This statement can be seen from the date that shows
that the two Islamic banks occupy the first quadrant with the results of high sharia compliance with
high financial performance.
•
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 Terima Kasih
Thank You
Syukria
‫شـكـرا جـزيـال‬

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