THE COMPARISON OF PERFORMANCE AMONG NINE BIGGEST BANKS IN INDONESIA BEFORE AND AFTER THE IMPLEMENTATION OF INDONESIA BANKING ARCHITECTURE

Abstract

Like in many countries, banking industry in Indonesia is more dynamic in the last decade. Level of market
competition among banks tends to increase continuously. This phenomenon has encouraged banks to create
the more advanced products and services to fulfi ll the growing needs of modern banking customers. As
the monetary authority, Bank Indonesia has launched the Indonesia Banking Architecture to manage these
dynamics. IBA is a fundamental framework of banking system and provides a direction for banking operational
in Indonesia within 5 to 10 years. It is expected that IBA will create conducive environment which will enable
banks to improve their performance. This research is aimed to compare and analyze the performance of nine
biggest banks in Indonesia before and after the implementation of IBA in 2004. The performance indicators
used are including ROA, ROE, NIM, CAR, LDR, and NPL. The data on these indicators are collected in the
period of 2000-2009. The period of 2000-2004 is considered as before the implementation of IBA, while 2005-
2009 is defi ned as after the implementation of IBA. The main tool of analysis used in this research is the mean
equality test.
Keywords: bank, Indonesia Banking Architecture, performance.