Transparency and Performance of Islamic Banking  the Implications for Profit Distribution (Empirical Study of Indonesia and Malaysia)

Indah Setia Utami

doi:10.55927/fjst.v2i3.3298

Authors

Indah Setia Utami Department of Accounting, Faculty of Economic, Universitas Terbuka

DOI:

https://doi.org/10.55927/fjst.v2i3.3298

Keywords:

Transparency, Performance, Profit Distribution, Islamic Banking

Abstract

The objective of this paper is to assess the effect of transparency and performance on the distribution of profits in Islamic banks in Indonesia and Malaysia. This study employed content analysis of published annual reports as well as multiple regression analysis. Samples were taken using the purposive sampling technique. The results of the analysis showed that both transparency and performance simultaneously have a positive effect on profit distribution, but partially only transparency has an effect on profit distribution. This could be due to the fact that in Indonesia and Malaysia, Islamic banks operate in a dual banking system where both conventional and Islamic banks coexist. These banks compete with each other for deposit shares.

Downloads

Download data is not yet available.

References

Ariffin, N. M., Archer, S., & Karim, R. A. A. (2009). Risks in Islamic banks: Evidence from empirical research. Journal of Banking Regulation, 10(2), 153–163.

Asian Development Bank. (2022). Retrieved from https://www.adb.org/what wedo/sectors/finance/islamic-finance.

Farook, S, M. Hassan, M. K. & Gregory Clinch. (2012). Profit distribution management by Islamic banks: An empirical investigation." The Quarterly Review of Economics and Finance 52.3: 333-347.

Farook, S., Hassan, M. K., & Lanis, R. (2011). Determinants of corporate social responsibility disclosure: The case of Islamic banks. Journal of Islamic Accounting and Business Research, 2(2), 114–141.

Gilani, Hasan. (2015). Exploring the Ethical Aspects of Islamic Banking. International Journal of Islamic and Middle Eastern Finance and Management 8(1):85-98.

Kuncoro Mudrajat dan Suhardjono, (2002), manajemen perbankan: Teori dan Aplikasi. Edisi Pertama. Cetakan Pertama. Yoyakarta: BPFE.

Lachrech, Nada., Lachrech, T., dan Boulaksil,Y. 2014. Transparency and performance in Islamic Banking. Impications on profit dsitribution. The International Journal of Islamic and Middle Eastern Finance and Management No 1 Vol 7, 61-88.

Mahdi, I. B. S., & Abbes, M. B. (2018). Behavioral explanation for risk taking in Islamic and conventional banks. In Research in International Business and Finance (Vol. 45, pp. 577–587). Elsevier Ltd. https://doi.org/10.1016/j.ribaf.2017.07.111

Maulina, 2013. “Faktor-Faktor Yang Mempengaruhi Profit Distribution Management atas Simpanan Deposan Pada Bank Syariah Di Indonesia PERIODE 2008-2012”. Proceeding The 2 Corporate Sustainability Conference.

Muhammad. (2005). Manajemen Pembiayaan Bank Syariah. Yogyakarta: UPP AMPYKPN.

Mulyo, G.P., & Mutmainah, S. (2013).Determinan Profit Distribution Management Bank Syariah di Indonesia Periode 2008-2011. Jurnal Ekonomi, Manajemen dan Akutansi Islam Vol1, No1 , 31-41.

Pratiwi, Ema. 2014. Analisis Kinerja Keuangan Bank Umum Syariah di Indonesia.

Rasli, S., Kassim, A. A. M., & Bhuiyan, A. B. (2020). Shariah Governance Characteristics and Risk-Taking of Local and Foreign Islamic Banks in Malaysia: A Conceptual Model. Journal of Accounting and Finance in Emerging Economies, 6(2), 441-451.

Rosly, S. (2005). Critical issues on Islamic banking and financial markets: Islamic economics, Banking and Finance, Investments. Takaful and Financial Planning, Dinamas Publishing.

Sahajwala, R., &Bergh,P. V. D. (2000). Supervisory Risk Assessment and Early Warning Systems. Basel Committee on Banking Supervision Working Papers No. 4, Bank for International Settlements (BIS), Basel, Switzerland, December.

Sekreter, A. (2011). Sharing Risks in Islamic Finance. IBSU Scientific Journal,55(2),13-20.

Siddiqui, A. A., &tirRazia, E. (2020). PRACTITIONERS’PERSPECTIVE: The Premise of Islamic Banking, Disclosures, Transparency, and Investors’ Confidence. Journal of Islamic Business and Management, 10(2), 436-440

Srairi, S. (2019). Transparency and bank risk-taking in GCC Islamic banking. Borsa Istanbul Review, 19, S64–S74. https://doi.org/10.1016/j.bir.2019.02.001

Sundararajan, V., & Errico, L. (2002). Islamic financial institutions and products in the global financial system: Key issues in risk management and challenges ahead. IMF Working Paper, 02/192. Washington: International Monetary Fund.

Sihombing, J., & Pangaribuan, H. (2017). A Study of Corporate Governance Structure, Disclosure and Information Asymmetry in Indonesia Banking Industry. Jurnal Akuntansi. 21 (2), pp. 156-169