Proceedings of the 1st International Conference on Management, Business, Applied Science, Engineering and Sustainability Development, ICMASES 2019, 9-10 February 2019, Malang, Indonesia

Research Article

Determinants of Islamic Banks’ Profitability in Indonesia

Download325 downloads
  • @INPROCEEDINGS{10.4108/eai.3-8-2019.2290731,
        author={N D P Rini and D I Burhany},
        title={Determinants of Islamic Banks’ Profitability in Indonesia},
        proceedings={Proceedings of the 1st International Conference on Management, Business, Applied Science, Engineering and Sustainability Development, ICMASES 2019, 9-10 February 2019, Malang, Indonesia},
        publisher={EAI},
        proceedings_a={ICMASES},
        year={2020},
        month={1},
        keywords={return on assets (roa) capital adequacy ratio (car) net performing financing (npf) operational expenses per operating income (bopo) financing to deposit ratio (fdr) bi rate inflation},
        doi={10.4108/eai.3-8-2019.2290731}
    }
    
  • N D P Rini
    D I Burhany
    Year: 2020
    Determinants of Islamic Banks’ Profitability in Indonesia
    ICMASES
    EAI
    DOI: 10.4108/eai.3-8-2019.2290731
N D P Rini1,*, D I Burhany1
  • 1: Applied Master of Islamic Finance and Banking, Bandung State Polytetchnic, Indonesia
*Contact email: Noerdwipurnamarini@gmail.com

Abstract

This research aims to examine the determinants of Islamic Banks’ profitability in Indonesia, consisting of internal and external factors. The research method is descriptive verificative. The research sample is 12 Islamic Commercial Banks that publish their financial statements for period 2013-2017. Data research is secondary data that is the annual financial reports published by Bank Indonesia and Financial Services Authority or OJK for variables CAR, NPF, BOPO, FDR; the annual Islamic Commercial Bank report for variable ROA; the annual report of Bank Indonesia and Indonesian Central Bureau of Statistics for variables BI Rate and Inflation. This panel data, a combination of cross-section and time series, analyzed using regression analysis method. The study result found that internal factors CAR and NPF have positive effect on ROA, while BOPO and FDR have negative effect on ROA. Meanwhile, external factors BI Rate and Inflation have no effect on ROA.