Capital Buffers, Leverage, and Asset Quality in Islamic Banks: Comparative Evidence from BSI and BIMB

Abstract

Purpose: This study compares the post-merger financial performance of Bank Syariah Indonesia (BSI) and Bank Islam Malaysia Berhad (BIMB) during 2021–2024 across profitability, efficiency, intermediation, capital strength, leverage, and asset quality. Methodology: Using 16 matched quarterly observations (2021Q1–2024Q4), paired differences were assessed using ratio-appropriate transformations and paired t-tests or Wilcoxon signed-rank tests according to distributional diagnostics. Results: BSI records higher ROA and ROE, stronger capital and equity buffers, and lower leverage. BIMB exhibits lower operating costs and deeper intermediation through higher FDR and FAR. Asset quality is mixed: BSI has higher gross NPF but lower net NPF, while BIMB shows stronger gross financing quality. Conclusion: BSI demonstrates comparative strengths in profitability and capital resilience, whereas BIMB performs better in cost efficiency and intermediation. Implications: Because the evidence is limited to two banks and 16 quarters, generalization should be cautious. Even so, the findings support stronger cost and asset-quality management at BSI and closer liquidity management at BIMB. Originality: The study provides a post-merger matched-quarter comparison of BSI and BIMB within an integrated prudential–profitability framework.