PERFORMANCE ANALYSIS OF THE ISLAMIC BANKING INDUSTRY IN INDONESIA FOR THE 2022-2024 PERIOD: SCP AND QUANTITATIVE REGRESSION APPROACHES

Abstract

This study aims to analyze the performance of the Islamic banking industry in Indonesia during the period 2022-2024 using the Structure-Conduct-Performance (SCP) approach and quantitative regression. The data used is secondary data obtained from the annual financial statements of ten Islamic banks listed on the Indonesia Stock Exchange (IDX). Industry structure was analyzed using Market Share (MS), Concentration Ratio (CR4), Herfindahl-Hirschman Index (HHI), and Minimum Efficient Scale (MES). Firm behavior is measured through Capital to Labor Ratio (CLR), while firm performance is measured using Price-Cost Margin (PCM). Panel data regression method with Ordinary Least Square (OLS) approach was used in the analysis. The results show that the Islamic banking industry in Indonesia is in a tight oligopoly market structure with high entry barriers. The regression results show that CR4 and CLR variables have no significant effect on PCM partially, while operational efficiency (XEF) has a significant and positive effect. Simultaneously, all independent variables have a significant effect on PCM. This indicates that operational efficiency is a major factor in determining the profitability of the Islamic banking industry.