ISLAMICITY PERPORMANCE INDEX: DOES IT AFFECT THE LOYALTY OF ISLAMIC BANK CUSTOMERS?

Abstract

The purpose of this paper is to determine the effect of financial performance using the Islamicity
performance index, which consists of profit-sharing ratio, zakat performance ratio, and equitable
distribution ratio on the loyalty of Islamic bank customers. We use a descriptive method by analyzing
annual reports and financial reports of all Islamic commercial banks in Indonesia. The results showed
that profit-sharing ratios and equitable distribution ratios with indicators of the use of benevolent funds
affect customer loyalty while zakat performance ratios and equitable distribution ratios with indicators
of labor costs and net income do not affect customer loyalty. We conclude that the majority of Islamic
bank customers are relational customers, they not only pay attention to the halal of the Islamic product
but also the amount of profit-sharing from savings or investment obtained from Islamic banks.
Therefore, Islamic banks must improve their financial performance by continuing to increase the
awareness of Indonesian Muslims about the prohibition of bank interest so that the market share of
Islamic banks continues to increase.