This research empirically and comparatively examines the quality of
conventional and Islamic banks' asset management in Indonesia during the
period 2009-2011. Four general conventional banks [i.e., Bank Mandiri
Indonesia (BMI), Bank Rakyat Indonesia (BRI), Bank Central Asia (BCA),
and Bank Nasional Indonesia (BNI)] and four Islamic banks (Bank
Muamalat, Bank Syariah Mandiri, Bank Syariah Mega Indonesia, and Bank
Syariah BRI) were, respectively, explored. Specifically, the purpose of
this study is to compare the quality of the Islamic and conventional
banks' asset management with the CAMEL (capital, asset, management,
earning, and liquidity) method. It also attempts to analyse the
influences of the ROA (Return on Asset), TLTA (Total Loan to Total
Assets), and OITL (Operating Income to Total Liabilities) on the quality
of the banks' asset management. The CAMEL method was used to evaluate
the quality level of the banks' asset management, while the multiple
regression analysis was then adopted to explore the determinants of the
quality of the banks' asset management. The study documented that Bank
Syariah BRI was the best performing bank, with the highest CAMEL score
of 50.33, while Bank Mandiri Indonesia was the worst performer with the
lowest CAMEL score of 26.33. As a group, the Islamic banks were found to
have better rankings, i.e., positions 1, 2, 3, and 6, while the
conventional banks were found in 4, 5, 7, and 8, respectively. The study
proved that the Islamic banks have a better asset management quality
compared to their conventional counterparts. The Islamic banks were also
proved to be better able to withstand the risks, particularly the
financing risk. [ABSTRACT FROM AUTHOR]