Comparative analysis of the financial performance of Bank Riau Kepri Syariah before and after conversion

Busyro, Wahyi
Abdullah, Azwan bin
Din, Noormariana binti Mohd

Journal of Accounting and Investment
Vol. 26 No. 3: September 2025

Research aims: This study compares the financial performance of Bank Riau Kepri Syariah before and after its conversion into a fully Islamic bank, focusing on the Capital Adequacy Ratio (CAR), Non-Performing Financing (NPF), and Return on Assets (ROA). Using quantitative data from 16 quarterly periods, the results reveal no significant changes in CAR and NPF, but a significant decline in ROA, indicating a decrease in short-term profitability following the conversion.Design/Methodology/Approach: The study employs a quantitative approach by analyzing financial data from 16 quarters (10 before and 6 after the conversion) using SPSS for statistical testing.Research findings: The results show no significant difference in CAR between the pre-conversion (21.733%) and post-conversion (21.69%) periods. Similarly, there is no significant difference between the pre-conversion NPF (2.697%) and the post-conversion NPF (2.39%). However, a significant difference is found in ROA, which declined from 2.611% to 1.55% after conversion, indicating a notable decrease in profitability.Theoretical contribution/Originality: This study contributes to institutional theory by illustrating how regulatory and organizational changes in Islamic banking affect financial performance through coercive, normative, and mimetic pressures.Practitioner/Policy implication: The findings offer valuable insights for regulators, managers, and policymakers in assessing the short-term financial risks of a full conversion to Islamic banking, emphasizing the importance of strategic planning, human resource preparedness, and regulatory compliance during transformation.Research limitation/Implication: This study focuses on a single case—the full conversion of Bank Riau Kepri Syariah—using real-time quarterly data to compare CAR, NPF, and ROA ratios since 2022. As one of Indonesia’s first regionally owned banks to complete a full transformation into an Islamic bank, Bank Riau Kepri provides a unique context for evaluating the financial impact of conversion.