Comparative study on financial performance of Islamic banks and conventional banks before and after COVID-19: Evidence from Indonesia

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The COVID-19 pandemic has affected bank lending growth to the point of decreasing banking profitability. Therefore, this study aims to analyze the differences in the performance of conventional banks and Islamic banks before and after the COVID-19 pandemic in Indonesia. This study uses secondary data with a quantitative approach. The performance is measured using four financial ratios: CAR, ROA, LDR or FDR, and BOPO. The population in this study is conventional banking and Islamic banking in Indonesia. The observation period for this study starts from pre-COVID-19 in June 2016 to March 2019 and post-COVID-19 from March 2020 to June 2023. The hypotheses were tested using the paired T-test and the one-sample Kolmogorov-Smirnov test for normally distributed data. The results of the one-sample Kolmogorov-Smirnov test on conventional banks show that whether there is a distinction between the performance of conventional banks and Islamic banks before and after the COVID-19 pandemic in Indonesia. The results of the graphic investigation indicate that there are financial ratios that have experienced an increase in performance, to be specific the CAR, ROA, and BOPO proportions, whereas the FDR or LDR tend to encounter a decrease in performance after COVID-19. There was an increase and decrease between before and after the outbreak of the COVID-19 pandemic in each proportion, which is still in the category with healthy and good banking qualification.

Acknowledgment
The substantial financial support for this study through the HIT funding scheme, provided by the Research and Innovation Institute (LRI) of Universitas Muhammadiyah Surakarta, is greatly appreciated by the authors.

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    • Table 1. Pre-COVID-19 and post-COVID-19 normality data test
    • Table 2. T-test for the CAR variable
    • Table 3. T-test for the ROA variable
    • Table 4. T-test for the LDR or FDR variable
    • Table 5. T-test for the BOPO variable
    • Conceptualization
      Imron Rosyadi, Nur Rizqi Febriandika, Nanda Nur Aisyah
    • Formal Analysis
      Imron Rosyadi, Nur Rizqi Febriandika, Nanda Nur Aisyah
    • Investigation
      Imron Rosyadi, Nanda Nur Aisyah
    • Validation
      Imron Rosyadi, Nur Rizqi Febriandika, Nanda Nur Aisyah, Mauizhotul Hasanah
    • Writing – original draft
      Imron Rosyadi, Nur Rizqi Febriandika, Nanda Nur Aisyah, Mauizhotul Hasanah
    • Data curation
      Nur Rizqi Febriandika, Mauizhotul Hasanah
    • Funding acquisition
      Nur Rizqi Febriandika
    • Methodology
      Nur Rizqi Febriandika
    • Project administration
      Nur Rizqi Febriandika
    • Resources
      Nur Rizqi Febriandika
    • Software
      Nur Rizqi Febriandika, Mauizhotul Hasanah
    • Supervision
      Nur Rizqi Febriandika, Mauizhotul Hasanah
    • Writing – review & editing
      Nur Rizqi Febriandika, Mauizhotul Hasanah