Determinants of Profitability in Islamic Commercial Banks
This study investigates the elements that affect profitability in Islamic Commercial Banks (BUS) in Indonesia from 2019 to 2023. It specifically analyzes the influence of the Capital Adequacy Ratio (CAR), Non-Performing Financing (NPF), and MSME Financing on Return on Assets (ROA). Utilizing second...
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| Format: | Article |
| Language: | English |
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Universitas KH Abdul Chalim, Prodi Ekonomi Syariah
2025-01-01
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| Series: | Indonesian Interdisciplinary Journal of Sharia Economics |
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| Online Access: | https://e-journal.uac.ac.id/index.php/iijse/article/view/6001 |
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| author | Shelvita Meilani Kusuma Wati Imron Rosyadi |
| author_facet | Shelvita Meilani Kusuma Wati Imron Rosyadi |
| author_sort | Shelvita Meilani Kusuma Wati |
| collection | DOAJ |
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This study investigates the elements that affect profitability in Islamic Commercial Banks (BUS) in Indonesia from 2019 to 2023. It specifically analyzes the influence of the Capital Adequacy Ratio (CAR), Non-Performing Financing (NPF), and MSME Financing on Return on Assets (ROA). Utilizing secondary time-series data from 12 banks overseen by the Financial Services Authority (OJK), a quantitative descriptive methodology is applied. The relationships among these variables are evaluated through multiple linear regression and classical assumption testing. The findings reveal that CAR significantly and positively affects ROA, indicating that higher capital reserves improve financial stability and support operational activities. Conversely, NPF does not significantly affect ROA, implying that although it introduces certain risks, it does not directly hinder profitability. Additionally, MSME financing does not exhibit a significant effect on ROA, as delayed repayments may hinder profit management.
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| format | Article |
| id | doaj-art-059a52026da44f649b08019712aa5448 |
| institution | Kabale University |
| issn | 2621-606X |
| language | English |
| publishDate | 2025-01-01 |
| publisher | Universitas KH Abdul Chalim, Prodi Ekonomi Syariah |
| record_format | Article |
| series | Indonesian Interdisciplinary Journal of Sharia Economics |
| spelling | doaj-art-059a52026da44f649b08019712aa54482025-01-10T16:02:49ZengUniversitas KH Abdul Chalim, Prodi Ekonomi SyariahIndonesian Interdisciplinary Journal of Sharia Economics2621-606X2025-01-018110.31538/iijse.v8i1.6001Determinants of Profitability in Islamic Commercial BanksShelvita Meilani Kusuma Wati0Imron Rosyadi1Universitas Muhammadiyah Surakarta, Surakarta, IndonesiaUniversitas Muhammadiyah Surakarta, Surakarta, Indonesia This study investigates the elements that affect profitability in Islamic Commercial Banks (BUS) in Indonesia from 2019 to 2023. It specifically analyzes the influence of the Capital Adequacy Ratio (CAR), Non-Performing Financing (NPF), and MSME Financing on Return on Assets (ROA). Utilizing secondary time-series data from 12 banks overseen by the Financial Services Authority (OJK), a quantitative descriptive methodology is applied. The relationships among these variables are evaluated through multiple linear regression and classical assumption testing. The findings reveal that CAR significantly and positively affects ROA, indicating that higher capital reserves improve financial stability and support operational activities. Conversely, NPF does not significantly affect ROA, implying that although it introduces certain risks, it does not directly hinder profitability. Additionally, MSME financing does not exhibit a significant effect on ROA, as delayed repayments may hinder profit management. https://e-journal.uac.ac.id/index.php/iijse/article/view/6001Capital Adequacy Ratio (CAR)Islamic Commercial Banks (BUS)MSME FinancingNon-Performing Financing (NPF)Return on Assets (ROA) |
| spellingShingle | Shelvita Meilani Kusuma Wati Imron Rosyadi Determinants of Profitability in Islamic Commercial Banks Indonesian Interdisciplinary Journal of Sharia Economics Capital Adequacy Ratio (CAR) Islamic Commercial Banks (BUS) MSME Financing Non-Performing Financing (NPF) Return on Assets (ROA) |
| title | Determinants of Profitability in Islamic Commercial Banks |
| title_full | Determinants of Profitability in Islamic Commercial Banks |
| title_fullStr | Determinants of Profitability in Islamic Commercial Banks |
| title_full_unstemmed | Determinants of Profitability in Islamic Commercial Banks |
| title_short | Determinants of Profitability in Islamic Commercial Banks |
| title_sort | determinants of profitability in islamic commercial banks |
| topic | Capital Adequacy Ratio (CAR) Islamic Commercial Banks (BUS) MSME Financing Non-Performing Financing (NPF) Return on Assets (ROA) |
| url | https://e-journal.uac.ac.id/index.php/iijse/article/view/6001 |
| work_keys_str_mv | AT shelvitameilanikusumawati determinantsofprofitabilityinislamiccommercialbanks AT imronrosyadi determinantsofprofitabilityinislamiccommercialbanks |