Does Non-Performing Financing and Capital Adequacy Impact Profitability of Islamic Banks in Indonesia?

Mokhammad Ridho and Ely Siswanto ()
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Mokhammad Ridho: Universitas Negeri Malang, Faculty of Economics and Business
Ely Siswanto: Universitas Negeri Malang, Faculty of Economics and Business

A chapter in Proceedings of the BISTIC Business Innovation Sustainability and Technology International Conference (BISTIC 2023), 2023, pp 160-170 from Springer

Abstract: ABSTRACT This research seeks to investigate the correlation between the impact of Capital Adequacy Ratio (CAR), Non-Performing Financing (NPF), Financing to Deposit Ratio (FDR), and Operational Efficiency Ratio (OER) on the profitability of Islamic Banks, specifically the Return on Assets (ROA). The population in this study included Sharia Commercial Banks registered by the Financial Services Authority (OJK) and the sampling method was purposive sampling. The research data used are financial statements for the 2017-2022 period with a total sample of 14 Sharia Commercial Banks. The analysis method is Multiple Linear Regression processed by Stata. The results of multiple linear regression analysis showed that the Islamic commercial banks study population covering 20 bank quarterly financial statements had negative results on all variables and CAR and NPF had no significant effect on ROA, while FDR and OER had a significant relationship with ROA.

Keywords: Financial Performance; Profitability; Return on Assets (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:spr:advbcp:978-94-6463-302-3_20

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DOI: 10.2991/978-94-6463-302-3_20

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