Comparative financial risk of conventional and Islamic bank

This research aims to analyze and compare the level of financial risk for both of conventional banks and Islamic banks for 2016. The data used in this study is secondary data in the form of company financial statements obtained from www.idx.co.id and webs of each bank. The method of analysis used in this research is Z-score discriminant analysis. From the results of the data analysis in this research, it can be reported that conventional banks are in a high risk category because they have a mean Z score value of 0, 24 (0,24 <1,81) while Islamic banks also have high level of risk because the mean of their value of Z -score is also below 1.81(0.96 <1.81). A comparison of the level of financial risk using the discriminant analysis results (Z-score) shows that both of banks are in a high risk position. However, conventional banks are greater risk than Islamic banks because they have a lower average Z-score. The results of this study indicates that the banks are in a high risk financial position and poor financial management could lead to bankruptcy in the long run.