Islamic Banks’ Risks and Profitability A Case Study on Islamic Banks in Indonesia

Abstract

The development of Islamic banks shows excellent growth in terms of assets, third party funds, and financing. However, the growth of Islamic banks, which is approximately 5%, is relatively small nationally. For this reason, researches on Islamic banks always attracts attention. The purpose of this study is to analyze the factors that influence the profitability of Islamic banks. The profitability of Islamic banks is measured using return on assets (ROA), while the factors suspected of affecting profitability are capital risks are measured using the capital adequacy ratio (CAR), financing risk is measured using non-performing financing (NPF), operating risk is measured using operational costs to operational income ratio (OCOI), and company’s size (SZ). The population of this study is 13 Islamic banks with a sample of 7 banks implementing a purposive sampling method. The observation period is 8 years (2011-2018), with quarterly data. The analysis tool to test the hypotheses is multiple regression. The results showed that capital risk (CAR) had a significant but negative effect on profitability, operating risk (OCOI) had a significant but negative effect. While financing risk (NPF) and company’s size (SZ) had no significant effect on profitability.Keyword: capital risks, financing risks, operational risks, profitability

Analisis Pengaruh FDR Dan NPF Terhadap Profitabilitas Bank Syariah Di Indonesia

“…Menurut (Paulin & Wiryono, 2015), Profitabilitas perbankan dapat diketahui dengan melihat ROA (Return on Asset) dari suatu perbankan, dimana rasio ini dianggap sesuai untuk menjelaskan profitabilitas karena fokus terhadap kapasitas bank dalam memperoleh pendapatan dalam aktifitas operasional dengan menggunakan aset bank tersebut, dan bahwa efisiensi bank syariah dipengaruhi secara signifikan oleh return on asset (ROA), rasio efisiensi operasional (OER), dan tingkat inflasi (INF) (Havidz & Setiawan, 2015) Profitabilitas perbankan syariah diperoleh dari pembiayaan yang ditawarkan sehingga semakin besar pembiayaan yang ditawarkan maka peluang untuk meningkatkan profitabilitas semakin tinggi. Adapun semakin besarnya tawaran pembiayaan tanpa analisis yang baik mempunyai peluang bermasalah yang tinggi atau sering disebut sebagai Non Performing Financing (NFP) (Sutrisno, 2020). Menurut (Paulin & Wiryono, 2015), semakin tinggi rasio NPF menunjukkan bahwa profitabilitas yang dapat diukur dengan rasio ROA akan semakin menurun.…”

Analysis of the Effect of Total Asset Turnover (TATO), Cost of Goods Sold (CGS), and Net Working Capital (NWC) on Net Profit Margin (NPM) in Food and Beverage Sub-Sector Companies Listed on the Indonesia Stock Exchange 2016-2018

“…Signaling theory was first introduced by Spence in his research entitled Job Market Signaling. Spence (1973) in Muliawati (2015) [2] suggests that the signal or signal gives a signal, the sender (information owner) tries to provide relevant pieces of information that can be utilized by the recipient. The implications of signaling theory in this study are based on how companies should give signals to users of financial statements, so that companies can maximize net profit from sales.…”

Islamic Banking Profitability in Indonesia

“…Thus, the higher the NPF, the lower the profitability. Supriadi, Hasanudin, & Uzliawati, Lia, Haerani (2021); Istiqomaha, Hendratmi, Sukmaningrumb, & Widiastuti (2021); and Lohano & Kashif (2019) found a significant and negative effect between NPF and profitability, but Sutrisno (2018) and Sofyan (2019) found NPF had no effect on bank profitability.…”

“…The results showed that Size had a significant and positive effect on profitability (Petria, Camparu, & Ihnatov, 2015;Istiqomaha et al, 2021;Lohano & Kashif, 2019). Meanwhile, Durguti et al, (2020) found a negative effect, while Al-Harbi (2019), Widarjono (2018), Sutrisno (2018), and Al-abedallat (2017) found that SIZE had no effect on profitability.…”