Heru Fahlevi, Irsyadillah and Putra Randa
Syiah Kuala University, Banda Aceh – Indonesia

Year: January 2017
Volume: 26 No. 2
Pages: 41–52


The purpose of this paper is to evaluate the financial performance and the sharia conformity of Indonesian and Malaysian Islamic banks. In particular, the study aims to expand the approach of Islamic banks performance assessment by adding two models of sharia conformity measurements, that is, Sharia Conformity and Profitability (SCnP) and Sharia- Compliant Indicator (SCI). The SCnP model unveiled that the studied Islamic banks generally conform with the sharia principles, although they were relatively less profitable. The Malaysian banks performed financially better during the period of study, but the Indonesian Islamic banks conformed more to the Islamic principles. In addition, the SCI Index uncovered different level of disclosure among the Islamic banks.