1.
Introduction
One of the main player islamic bank and the first
islamic bank in Indonesia is Bank Muamalat Indonesia(BMI). Today Bank Muamalat
provides services to approximately 4.3 million customers through 457 service
offices in all34 provinces in Indonesia. Bank Muamalat is the only Indonesian
sharia bank to expand overseas by opening a branch office in Kuala Lumpur,
Malaysia. This pioneer of islamic banking has always been committed and bringing competitive and easily accessible
islamic banking services for people in the various corners of the archipelago. That
commitment has received appreciations from the government, the media, national
and international institutions,and the community by the granting of more than
100 prestigious awards in the past 5 years.
Islamic bank should not only focus on profit as business
institution. As islamic financial institution, it also has main functions: to educate
ummah, promote welfare, and establish justice. In this paper, the performance
financial ratio as well as their contribution to maqashid syariah of BMI will
be elaborated, followed by analysis, and closed by conclusion.
2.
Result 2013-2014
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PERIODE DECEMBER 2014 AND 2013
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PERFORMANCE RATIO ANALYSIS
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SPECIAL FOCUS ON MAQASHID
SYARIAH
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PT. BANK MUAMALAT INDONESIA,
TBK
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RATIO
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2014
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2013
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CHANGE
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INTERPRETATION
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1
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Profitability Ratio
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b
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Return On
Asset/ROA (%) *)
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0.17%
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0.50%
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-0.33%
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In 2014, BMI recorded a ROA of 0,17% , decrease
as 0,33% due to decrease in Income before tax as 147,47% (from 239Bio in 2013
to 96 Bio in 2014) whereas the average
total asset increase 13,92% (from 53T
to 62,4 T). The source of significance decrease is from bank share in revenue
sharing which decline as 308Bio, other operating income as 68Bio and non-operating
income 7Bio.
The lower the ROA number in 2014, the worse,
because BMI is earning less money on
more usage of asset.
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a
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Return On
Equity/ROE (%) *)
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2.13%
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11.41%
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-9.28%
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In 2014, BMI recorded ROE of 2,13% due to
decrease in Income after tax from 165Bio in 2013 to 57 Bio in 2014 whereas the average total equity increase
from 2T to 2,6T.
The lower the ratio percentage, the less
efficient management is in utilizing its equity base and the worse return is
to investors.
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2
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Solvency (Liquidity Ratio)
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a
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Current
Ratio
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2,10
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1,89
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20.39%
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There is an increase in current ratio because
total current asset of Bank Muamalat in 2014 was recorded at 18,9T, an
increase of 5,53% from 2013 which was recorded at 17,9T. The increase was
contributed by placement in central bank (Bank Indonesia) in the form of
FASBIS and SBIS and invesment securities.In adddition. there is a decrease in total current liability from
9,4T in 2013 to 9.in 2014 ,
BMI current ratio of 2 is considered to be
acceptable. The higher the current ratio is, the more capable the company is
to pay its obligations.
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b
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Quick Acid Ratio
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2,07
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1,87
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19.60%
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There is an increase in quick acid ratio because
(total curreent asset-asset for ijarah) of Bank Muamalat in 2014 was recorded
at 16, 69T, an increase of 54,17% from 2013 which was recorded at 10,18T. T.
Moreover, there is a decrease in total
current liability from 9,4T in 2013 to 9.in 2014
The quick acid-test ratio is almost same with the
current ratio, it means that current assets are not dependent on inventory
(asset for ijarah). It makes senses because the portion of ijarah
financing is only 0,6% of BMI’s total
financing.
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3
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Special Perfomance Ratio for Banks
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a
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Operating expense ratio (OE/Average portofolio)
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7.36%
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9.12%
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-1.76%
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Bank is more efficient in managing portfolio because the increase
of operating expense which is as 9,81% only(from 1,6T to 1,8T), lower than
the increase of average portolio is as 9,97% (from 18Tto 24T)
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b
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Portofolio yield (Financial income/averrage portofolio)
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10.66%
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12.00%
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-1.34%
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There is a decrease in the yield from bank
activity in managing portfolio because the amount of increase of financial
income which is as 18% only(from 2,1T to 2,6T), lower than the increase of
average portolio is as 27% (from 18Tto
24T). It may show the worse return of bank’s portfolio in 2014.
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c
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Cost per client (operating expense/number of
clients
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Rp426,965
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Rp385,063
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10.88%
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There is an increase in cost per client as 10,88 %
due to the increase of operating expense which is as 9,81% (from 1,6T
to 1,8T), higher than the number of
client ( 4,3M). Bank may not more efficient because they need more money to
serve their clients.
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d
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Cost per unit of capital allocated (operating
expenses/value of financing)
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9.03%
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8.35%
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0.67%
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There is an increase as 0,67% in cost per unit of
capital allocated.The cause is the increase of operating expense which is as
9,81% ((from 1,6T to 1,8T) , higher than the increase of value of financing
is as 2,54% (from 19,8T to 20T). It describe bank is less efficient in managing their financing (murabaha,
Ijarah, istishna). It may because in 2014, bank is more focus in financing
SME sector that spend more expenses
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e
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Staff ratio
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(active clients/officers
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644
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712
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-9.46%
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In 2014, BMI's service is more effective, because
of the increase in officers which is
as 9,46% (6038 to 6669 officers). As
result, in 2014, it is assumed that approximately 1 BMI's officers serves 644 active clients a year or equal to 54
client per month
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(financing/ officer)
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IDR 6,277,442,303
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IDR 6,630,979,473
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-5.33%
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The effectiveness of BMI’s service is also
because in 2014, there is a decrease of total financing that handled by each
officer. It is caused of total financing increase as 4,36% from 40T to 41T, however the the increase of
total officer is higher as 9,56%.
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f
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Client retention
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Number of new clients
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1047
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491
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113.24%
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The information just is provided for 'cash
management system' client (corporate customer ). However, BMI show good client retention for their corporate
customers.The number of new corporate customers significantly grow from the total of 217 customers in 2012, to
708 customers in 2013, and on to 1755 customers by the end of 2014
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Number of clients lost
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-
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-
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information not available
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Clients turnover
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-
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-
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information not available
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Average number of clients trend
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1231.5
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462.5
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166.27%
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the average of corporate customer increase, over
double from 246 in 2013 to 524
customers in 2014. Their better performance and service in 2014 can be shown
by significant increase of their client retention
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4
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Investment Ratio
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a
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Earning per share (EPS)
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5.60
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21.73
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74.22%
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Earning per share for 2014 amounted to Rp5,6 only,
significantly decrease as 74.22% from the previous year. The cause is amount
of net income decrease from 165 Bio in 2013 to 57Bio in 2014 ;but weighted average number of outstanding
ordinary share increase from 7T to 10 T
The lower the EPS figure, the worse it is. A
lower EPS may the sign of lower earnings, not good financial position and,
therefore, a not good company to invest money. However, it should be noticed
that in 2014 actually all bank in Indonesia face similar condition because of
crisis and impact to bad performance in financing sector. So, to get better conclusion. It should
also compare it with the EPS figure of other Islamic bank in Indonesia.
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PE Ratio
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26.78
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6.90
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387.95%
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PE ratio increase from 6.9 to 26.78.
Theoretically, It means the investor is willing to pay more for Rp1 current
earning .
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B.
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Ratio Unique To Islamic Bank
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a
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Tadhib of Alfardh (Education the Ummah)
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i
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R1-Education grant/total income
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3.43%
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1.54%
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1.89%
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Education grant increase from 4,7Bio to 5,4Bio
although the total income (income from operation and non operating income)
decrease from 311Bio to 157Bio. The education is not only from internal bank
but also from customers charity contribution.
BMI has at least 5 education grant program: ISS: islamic boarding school to tsunami victim(spend 2,3Bio), B-Kru: non-banking crew BMI (1Bio), Daya: orphan mustahiq (0,5Bio), Orphan Kafala:tsunami victim, B-share(mustahiq) , B-Smart (underpreviledged achieving student) |
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Financial Literacy Education/Total Income
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0.04%
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0.00%
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100.00%
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In 2014, BMI start their CSR to give islamic
Banking literacy Education Program and spend almost 55M
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ii
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R2-Research expense/total expense
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0.19%
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0.17%
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0.01%
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Research expense increase from 2,8 Bio in 2013 to
3,5Bio in 2014, more than 18% whereas the total expense just increase as
12,72% from 1,6T to 1,8 T. It makes the portion of research expense/total
oexpense increase compared to previous year.
BMI has their own research, training, consultation, and publication institution (Muamalat Institute) , established in 1992 which one of the purpose is to develop, sozialise and educate sharia economic system to Indonesian people ; to produce qulified and proffesionalwokers with deep understanding about sharia economic principle |
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iii
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R3-Training expense/total expense
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0.77%
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2.72%
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-1.95%
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Training expense decline from 45Bio to 14
Mio because there was no MODP(Muamalat
Office Development program)expense incured in 2014
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iv
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R4-Publicity expense/total expense
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No info related to dislosure of advertising
/publicity and marketing cost. However, based on CG Report, BMI disclose that
they already advertised in magazine
14X,newspaper 71X, radio 127X,
television 44X; website, 20event in this year, special placement advertising
during ramadhan.
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b
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Iqamah -al-Adl (Establishing Justice)
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i
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Financing of MSME (Micro, Small and Medium
Enterprise)
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Rp8,57
T
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Rp 12,51T
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46,03%
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The total financing outstanding to the
MSME(Micro, Small and Medium Enterprise) sectors amounted to Rp8,57 T as at
year -end 2014, a drop of 46,03% compared to the amount of the previous year.
Since 2013, BMI has 55Micro Units and 12 Micro Clusters in operation to disburse direct financing facilities to business customer in 4 area in Indonesia. Microfinancing product has shown significant progress, growing from 3,47 billion with 30 financing account to 317 billion with 2211 financing account by the end of 2014. This sector give higher margin compared to financing margin in the commercial sector (Retail Business Segment). The challenge in this sector is the quantity and qualification of human capital |
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Financing of Small Business
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Rp8,1 T
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Rp 12,06 T
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49, 10%
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Total financing outstanding in the SME sector
accounted 20% of the total financing portofolio of BMI. However, the amount
declined by 49, 10% in 2014 to Rp8,1 T.The cause is the worsening performace
of business in mining, telecommunication, and transportation sector
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ii
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Promotion of small and medium cost house
financing
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No promotion of small and medium cost house
financing. Only promote iB Muamalat retirement; housing and vehicle financing
facility to the retired civil servant
and state-owned employee
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iii
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Provision of risk sharing product i.e musyarakah
and mudharabah as opposed to fixed income product
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The
ratio of Risk sharing product (musyarakah and mudharabah) is more than 50% in
BMI's financing. However individually,
musyarakah is on 2nd biggest portofolio (19,5T) after murabahah (20,1T in 2014)
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Mudharabah and musyarakah financing/total
financing
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50.81%
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50.02%
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0.80%
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In 2014,there is an increase in Musyarakah
financing from 17,9 T to 19,5T and decrease in mudharabah financing from2,1T
to 1,7 T . Musyarakah financing offered is to working capital (Musyarakah aqd
) and home financing (Musyarakah Mutanaqisah); and mudhrabah finanicng offered
is to working capital only.
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Fixed income financing/total financing
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48.59%
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49.51%
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-0.92%
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c
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Job al Maslaha (Promoting welfare)
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Zakat /Invesment
Account Deposit
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0.01%
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0.04%
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-0.03%
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Zakat expense decrease from 13 M in 2013 to 3M in
2014. However, IAH increase
between 35T in 2013 and 47T in 2014.
It caused the ratio of zakat to invesment account deposit become lower as
0,03%. It means the tenure of major IAH in the bank less <12 as="" become="" compared="" expense="" incurred="" less="" month.="" o:p="" previous="" result="" the="" to="" year.="" zakat="">
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Charitable contribution* /net income
*contribution from bank expense and zakat, infaq, shadaqah customer
*contribution from bank expense and zakat, infaq, shadaqah customer
20.78%
11.27%
9.51%
The
decrease in total CSR fund from 18Min 2013 to 11M in 2014, is not as significant as decrease in net income from
165Bio to 57Bio. As the result, the percentage of charitable contribution is
still higher than previous year.
In 2014, Bank Muamalat spend almost 11 M in conducting CSR activities with stressing in to four aspects :1. environmental, 2.social community development, 3. employement work health and safety, 4. responsibilities to the customer.
In 2014, Bank Muamalat spend almost 11 M in conducting CSR activities with stressing in to four aspects :1. environmental, 2.social community development, 3. employement work health and safety, 4. responsibilities to the customer.
Charitable contribution*/net income
*non operating expense
*non operating expense
2.39%
1.27%
1.12%
Although there is a decrease in donation expense from
2Bio to 1,3 Bio and decrease in net income from 165Bio to 57Bio, the portion
of bank donation over their net income in 2014 is higher (from 1,27% to 2,39%)
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Qard fnancing /total financing
0.30%
1.05%
-0.75%
There
is a significant decrease in qard financing from 420Bio to 127Bio ( up to
69,7%), whereas the total financing increase as 4,36% from 40T to 41T.
The decrease of qard is caused the decrease in financing for hajj bringing fund (Dana Talangan haji program) from 374Bio to 116 Bio due to be stoped in Desember 2013 by Central Bank.
In 2014, other qard Financing is used as subcontract to support export financing scheme (based on wakalah, qard, hiwalah); and import financing (wakalah, kafalah, qard, al-hiwalah as well as murabahah). The economy sector financed is business services (12Bio); agricultural (11Bio); electricty, gas and water (1Bio), transportation (497M), trading(128M), social/public (90M). Qard financing is also used as loan to 'key employement'.
The decrease of qard is caused the decrease in financing for hajj bringing fund (Dana Talangan haji program) from 374Bio to 116 Bio due to be stoped in Desember 2013 by Central Bank.
In 2014, other qard Financing is used as subcontract to support export financing scheme (based on wakalah, qard, hiwalah); and import financing (wakalah, kafalah, qard, al-hiwalah as well as murabahah). The economy sector financed is business services (12Bio); agricultural (11Bio); electricty, gas and water (1Bio), transportation (497M), trading(128M), social/public (90M). Qard financing is also used as loan to 'key employement'.
Source: Writer calculation
3.
Analysis
3.1 Profitability Ratio
In 2014, the operational performance of BMI is not
quite good. They cannot well utilize its resources in generating profit and
shareholder value, compared to 2013. It is shown through lower ROA(0,17%) and
ROE (2,13%). However, this situation actually was faced by all bank and Islamic
bank in Indonesia because of bad economic condition.
3.1 Solvency Ratio
BMI’s cash flow is sufficient to meet its short-term
and long-term liabilities. It is shown
through better current ratio (2,1) and quick acid ratio (2,07) in 2014. It may
indicate the lower probability that it will default on its debt obligations.
3.3 Special Perfomance
Ratio for Banks
Although their
profitability is not good in 2014, overall BMI’s performance is actually
better. BMI is more efficient in managing their portfolio for financial instrument compared to financing
(murabaha, ijarah, and istishna). It is shown by lower operating ratio expense
over portfolio as 7.36%, compared
to cost allocated to the financing
9.03%.
Moreover,
BMI’s better performance and service in 2014 can be shown by less client that
handled of one officer (1 officer serve 54 client per month), less amount of
financing that handled of one officer, a
significant increase of their client retention (as166.27%).
3.4 Investment Ratio
Although BMI’s ROA decreases in 2014, their P/E ratio increase (26,78)[1].
It could mean that a stock is overvalued, as a reflection of the market's
optimism concerning a firm's growth prospects.
3.5 Tadhib of Alfardh
(Education the Ummah)
BMI
has their own research, training, consultation, and publication institution
(Muamalat Institute) , established in 1992 which one of the purpose is to develop, socialise
and educate sharia economic system to Indonesian people ; to produce qualified
and professional workers with deep understanding about sharia economic
principle. It is not surprised that Muamalat Institute is as place to create
Islamic finance leader in Indonesia. BMI is also top leader in creating new
product based on research, like musyarakah mutanaqisah and IMBT which is in
Indonesia first developed and introduced by BMI. Moreover, most of their
employee also asked to work in another bank to establish new islamic bank
subsidiaries, or to create new business product.
Their
commitment and consistency to education the ummah can be shown in their
education grant and research expense that continuously increases although their
profitability condition was not good in 2014.
3.6
Iqamah -al-Adl (Establishing Justice)
BMI
is also well known as their expertise in managing SME sector, even in
microfinancing. Since 2013, BMI has 55 Micro Units and 12 Micro Clusters in
operation to disburse direct financing facilities to business customer in 4
area in Indonesia. Microfinancing product has shown significant progress,
growing from 3,47 billion with 30 financing account to 317 billion with 2211 financing account by the end of
2014. This sector also give higher margin compared to financing margin in the
commercial sector (Retail Business Segment).
The
ratio of musyarakah and mudharabah financing[2] is
more than 50% of BMI’s portfolio. It is also shown their commitment to implement
revenue sharing product rather than fixed income.
3.7
Job al Maslaha (Promoting welfare)
To build
sustainable development CSR Program, BMI established Baitul Maal Muamalat Foundation
(BMM). The activity is to accelerate the effective management of zakat and
charity fund (Qard Hasan). Bank is not
directly involved, but Bank takes the responsibility through their BMM. To
ensure the better management, the board of director in this BMM is selected from
former employee of BMI. This ‘affiliation’ model makes BMI can continuously
consistent in promoting welfare. It can be shown that although their net income
decrease, their charitable contribution (both internal bank’s or/and external
fund) increase.
In 2014, It is recorded the source of charitable contribution is
zakat funds 11.896.166.000(internal bank); 10.827.134 (external); qard hasan
3.973.950.000 (penalty) ; 2.579.259 (non-halal income). They spend almost 11 Billion
in conducting CSR activities with stressing in to four aspects:
1.
environmental,
2. social community development,
3. employment
work health and safety,
4. responsibilities
to the customer
BMI
well conduct their CSR progam.. It is proven by their model of CSR program :1.Bank
Muamalat's Mosque-Based Micro Business Community (KUM3) and 2. Islamic
Financial Services Cooperative of Bank Muamalat's Mosque-Based Micro Business
Community (KJKS-KUM3), which becomes the best zakah program for economy sector in
Indonesia. In this program, bank not only give charity fund, but sharing their
skill in financing. It is not just social and ‘giving back to community
program’, but it is sustainable program to promote long term welfare
4.
Conclusion
As conclusion, it is clear that BMI is beyond just a bank. In fact in 2014, although
their profitability is not as good previous year, their bank service
performance is even better. Moreover, their business condition does not make
BMI careless their role to ummah (in education, establishing justice, and
promoting welfare). Their overvalued in share, may reflect as the investor’s optimism
concerning a firm's growth prospects. Investor may take account BMI’s business
model that concern to impact to society will be ‘add –value’ to bank in future.
As result, BMI still become the main player and role model of Islamic bank in
Indonesia.
As lesson to another islamic bank, it is so possible to make bank
business-investment model that not only profitable but also can give impact to society
in same time. BMI already give the role model.
As recommendation to BMI, it is also important to bank to concern
‘how to increase the amount of zakat paid of investment account holder (IAH)’.
It is good to promote IAH to be more loyal in deposit their money in bank. It
is not only make bank can generate more profit, but also more zakat paid, at
the end it means more ummah that can take advantage.
References
AAOFI-Governance and Auditing
Standards. (2012). 4 Annual IIBI-ISRA Thematic Workshop. London, United Kingdom
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