THE IMPACT OF ISLAMIC ATTRIBUTES OF PRODUCT AND QUALITY OF SERVICE ON FINANCIAL PERFORMANCE IN ISLAMIC BANKING: CUSTOMER SATISFACTION AND LOYALTY AS MEDIATING VARIABLES

Abstract

Using the balanced-scorecard perspectives, this research investigates how Islamic attributes of products and quality of service determine customer satisfaction and loyalty as well as the level of revenue growth and Return on Assets (ROA) in Islamic Banks. The amount of respondents as sample was 120 from 3 Islamic Banks in Semarang. Data was . analyzed by Structural Equation Modeling (SElvO at 16.0 AMOS progftrm. The results indicate that the good internal business process drives entities' performance in customer perspective, although the relationship between customei and financial perspectives can not be found. Particularly, the results show that: (1) customer satisfaction is directly influenced by the quality of service, (2) customer loyalty is influenced directly by the Islamic attributes of products, (3) loyalty is directly influenced by customer satisfaction, (4) loyalty is indirectly influenced by the quality of service, and (5) rate of income gpwth directly affects the Return on Assets (ROA).