The Effect of Liquidity, Net Interest Margin and Good Corporate Governance Risk on Sharia Banking Financial Performance

Abstract

This research is categorized as quantitative research. While the research design used in this research is correlation analysis, which is a type of research carried out with the aim of detecting the extent to which variations in a factor are correlated with one or more other factors based on the correlation coefficient. The research objective is to explain the effect and hypothesis testing by analyzing various data in the field. In the context of this research is to obtain facts from existing phenomena and to seek factual information about the improvement of Islamic banking financial performance. The population in this study were 11 Islamic banks in Indonesia with a 3-year observation period 2018-2020. The technique for determining the number of samples used was the saturated sample method in which the number of sample observations was 33 observation data. Data collection methods used in this study are primary data and secondary data. The results showed that Liquidity Risk has a positive and significant effect on Islamic Banking Financial Performance. Net Interest Margin has a positive and significant effect on Islamic Banking Financial Performance, Good Corporate Governance has no and significant effect on Islamic Banking Financial Performance and simultaneously Liquidity Risk, Net Interest Margin and Good Corporate Governance have a positive and significant effect on Islamic Banking Financial Performance. 
 
 JEL: G30; G10; G24
 
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Environmental performance, Islamic corporate governance, and liquidity's impact on financial performance with sustainability reporting as a mediating factor

“…On the other hand, research conducted by Mardiani and Yadiati (2019a) and Hidayat et al (2021) show that Islamic Corporate Governance does not affect financial performance. But a study by Ben Abdallah and Bahloul (2021) states that Islamic Corporate Governance positively and significantly influences financial performance.…”