The Impact of Spin-Off Policy To The Profitability On Indonesian Islamic Banking Industry

Abstract

The purpose of this paper is to analyze that the spinoff policy that based on Islamic Banking Act No. 21/2008 had an impact on the profitability  ratio  of  Islamic  banking  industry  in  Indonesia.  This  research  used ordinary least square regression. The variable used in this paper is spin-off which is used as a dummy variable, and also included the internal factor of industry such  as  deposit  margin,  non-performing  financing  (NPF),  and  efficiency  ratio (measured by BOPO). The result showed that dummy variable of spin-off, NPF and BOPO had an impact on the profitability in Indonesian Islamic banking industry. The implication of this result is spin-off policy had a good impact on the profitability in Indonesian Islamic banking industry. According to this result, Bank Indonesia should stimulate the Islamic banking unit to spin-off from their parents conventional banks.

DOI:10.15408/aiq.v7i1.1363