Indonesian Islamic Bank Credibility and Customer Loyalty: Does Customer Satisfaction Really Serve as a Mediator Variable?

This research examined the influence of credibility on customer satisfaction and loyalty and to know whether the satisfaction mediated the credibility effects on customer loyalty of Islamic Banks in Indonesia or not. This study used primary data taken by distributing questionnaires to 280 respondents using a purposive sampling technique. The method of data analysis was Structural Equation Modelling (SEM) using Amos. The results indicated that the credibility of Indonesian Islamic banks significantly influenced customer satisfaction, Customer satisfaction significantly influenced customer loyalty, and Customer satisfaction could mediate the effect of credibility on customer loyalty. Then, credibility did not directly affect customer loyalty at Islamic banks but indirectly influenced customer loyalty. This research can be meaningful for universities to develop curricula, lecturers to develop teaching materials, students as references, Islamic banks to improve policies to increase customer loyalty, and central banks to develop regulations related to customers. Besides, in this research, the models of Islamic bank credibility, customer satisfaction, and loyalty were presented comprehensively and completely.