Sharia Business Unit Spin-off: Strategic Development Model of Sharia Banking in Indonesia

Iim Hilman

Abstract


Islamic bank in Indonesia in the last ten years shows a positive trend is quite impressive, the average asset growth of 30% is well above the average growth of conventional banks which only reached 15%. The other side, if the terms of its contribution to the national banking system is still very small, as indicated by the achievement of market share of Islamic banks until the end of December 2016 reached only 5.30% of the total national banking assets. Regarding to the objective conditions, would need the appropriate business development strategy to boost growth and expand market share, so that Islamic banks can increase their role in national economic activities. Spin-Off sharia business unit owned by a conventional bank is one of the business development strategy offered by the Banking Act. This paper aims to identify and measure the effectiveness of the implementation of the spin-off business unit into a sharia/Islamic banks (Sharia Commercial Bank-SCB) that have been carried out by some Islamic banks in Indonesia. The results show that the growth rate of SCB business activity is better than Sharia Business Unit (SBU), but in terms of profitability and efficiency level of SBU is better than SCB.


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DOI: 10.54655/ijibfr.v2n2p1

Copyright (c) 2018 Iim Hilman

License URL: http://creativecommons.org/licenses/by/4.0