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Cost Components as Predictors for the Profitability of sharia Banks : (Study on PT. Bank Syariah Mandiri and PT. Bank Syariah Mega Indonesia)

Author

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  • Mokhamad Anwar

    () (Department of Management and Business, Faculty of Economy, Padjadjaran University)

Abstract

The aim of this paper is to observe the cost structure in two prominent sharia banks in Indonesia. The Bank’s cost comprises of many cost components such as operational and non-operational costs. The study employed descriptive and inferential statistics to explain the data characteristics from those banks and tried to determine whether those costs influenced the profitability for the period of 2007-2008. The data were collected on the monthly basis for the period. The result of the study showed that there were some similarities and differences about the behavior of those banks within the study period. By using inferential statistics method, especially with the multiple regression analysis and hypothetical testing with F-test and t-test, the study demonstrated that the null-hypothesis was rejected which means that those costs simultaneously influenced on the bank’s profitability for the period.

Suggested Citation

  • Mokhamad Anwar, 2010. "Cost Components as Predictors for the Profitability of sharia Banks : (Study on PT. Bank Syariah Mandiri and PT. Bank Syariah Mega Indonesia)," Working Papers in Business, Management and Finance 201009, Department of Management and Business, Padjadjaran University, revised Sep 2010.
  • Handle: RePEc:unp:wpaman:201009
    as

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    File URL: http://lp3e.fe.unpad.ac.id/wpaman/201009.pdf
    File Function: First version, 2010
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    References listed on IDEAS

    as
    1. Fadzlan Sufian, 2007. "The efficiency of Islamic banking industry in Malaysia: Foreign vs domestic banks," Humanomics: The International Journal of Systems and Ethics, Emerald Group Publishing, vol. 23(3), pages 174-192, September.
    2. Berger, Allen N, 1995. "The Profit-Structure Relationship in Banking--Tests of Market-Power and Efficient-Structure Hypotheses," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 27(2), pages 404-431, May.
    3. repec:pal:jorsoc:v:57:y:2006:i:4:d:10.1057_palgrave.jors.2601985 is not listed on IDEAS
    4. Lloyd-Williams, D. M. & Molyneux, Phil & Thornton, John, 1994. "Market structure and performance in Spanish banking," Journal of Banking & Finance, Elsevier, vol. 18(3), pages 433-443, May.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    bank's costs; profitability; sharia banks;

    JEL classification:

    • G0 - Financial Economics - - General

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