Indonesia's Islamic Banking Market Share Continues to Grow Over the Past Decade

Economics & Macro

Premium

Adi Ahdiat 26/08/2024 18:43 WIB

URL has been copied

Memuat...

From 2014 to 2023, Indonesia's Islamic banking industry consistently demonstrated positive growth, in both asset value and market share.

The Value of Assets and Market Share of Islamic Banking in Indonesia (2014-2023)

A Small Font
A Medium Font
A Bigger Font

You are accessing content Single Data Premium.
To continue, please subscribe or buy individually.

Professional

Enjoy premium access with a more affordable price.

Start from

~~Rp300.000~~ 150.000/month

Access more premium content and exclusive features for customers.

Start from

50.000/month

Hanya Rp833 per artikel

More details »

Buy Retail

Read the article immediately “Indonesia's Islamic Banking Market Share Continues to Grow Over the Past Decade”.

Rp10.000

We accept the following payments:

Some payment methods are still in the process of being activated.

The Value of Assets and Market Share of Islamic Banking in Indonesia (2014-2023)

Download

Source

A Small Font
A Medium Font
A Bigger Font

Indonesia's Islamic banking industry has consistently shown positive growth over the past decade.

This growth is evident in both its asset value and national market share.

According to data from the Financial Services Authority (OJK), in 2014, the asset value of Islamic banks in Indonesia was only Rp278.9 trillion, equivalent to 4.85% of the total national banking assets.

In subsequent years, their asset value and market share continued to increase, as illustrated in the graph.

By the end of 2023, the asset value of Islamic banks had reached Rp892.17 trillion, equivalent to 7.44% of the total national banking assets.

"Although conventional banks have significantly larger assets in scale, the financing assets and third-party funds of Islamic banks have grown faster than those of conventional banks," stated the OJK in its *2023 Report on the Development of Islamic Finance in Indonesia*.

Citing the report, in 2023, the asset value of Islamic banks grew by 11.21% compared to 2022 (year-on-year/yoy), while conventional bank assets grew by 5.50% (yoy).

The OJK also noted that the value of Islamic bank financing in 2023 grew by 15.72% (yoy) to Rp585.46 trillion.

Furthermore, third-party funds (DPK) managed by Islamic banks in 2023 grew by 10.49% (yoy) to Rp684.52 trillion.

"The performance of Islamic banks indicates a healthy condition, demonstrated by adequate capitalization, sufficient short-term liquidity, stable profitability, and efficient operations," said the OJK.

It should be noted that the asset value of Islamic banks is a combination of assets from Islamic commercial banks (BUS), Islamic business units (UUS), and Islamic rural banks (BPRS).

In 2023, the largest portion of Islamic banking assets (66.7%) came from BUS, followed by UUS (30.7%), and BPRS (2.6%).

Editor : Adi Ahdiat

"Disclosure: This is an AI-generated translation of the original article. We strive for accuracy, but please note that automated translations may contain errors or slight inconsistencies."