Abstract
Islamic banks have been known as the resistant banks to the global crisis that hit Indonesia a few years ago. The unique maintenance of Islamic bank performance leads to business continuity. Some Islamic bank performance can be measured by its profitability. There are some factors that affect the profitability Islamic bank and used in this study including CAR, BOPO, and NPF. While the purpose of this study is to determine the effect of CAR, BOPO and NPF on the profitability of Islamic commercial banks. The population of this research is the Islamic commercial bank whose financial statements have been published to the statistics of Islamic banks from 2015 -2017. This research used secondary data from OJK website. Data analysis in this paper conducted multiple linear regression analysis method. The results of this study indicate that the BOPO variable has a significant effect on ROA. On the other hand CAR and NPF variables have no significant effect on ROA.
Highlights
According to Banking Act no. 10 Year 1998 bank can be defined as a bank is a business entity that collects funds from the public in the form of savings and distributes to the community in the form of credit and or other forms in order to improve the standard of living of many people
Interpretation of Influence of Independent Variables From the test of validity of advance influence seen that variable which have significant influence to profitability of Islamic Commercial Bank Operational Cost and Operating Income (BOPO)
If Operating Cost and Operating Income (BOPO) decreased by 1% profitability will increase by 0.110703%
Summary
According to Banking Act no. 10 Year 1998 bank can be defined as a bank is a business entity that collects funds from the public in the form of savings and distributes to the community in the form of credit and or other forms in order to improve the standard of living of many people. The development of Islamic banks gives an indication that the preference of Indonesian society is increasingly leading to Islamic transactions, the condition shows that the community has started to realize the existence of Islamic banks as a means of managing financial funds that based on Islamic principles that really blessed by Allah. 21 of 2008 on Islamic Banking which provides a clearer operating platform for Islamic banks. The existence of Islamic banking in Indonesia is currently increasing since the existence of Law no. It can be justified from the Islamic institutional development that has been increasing since the issuance of Law no. The existence of Islamic banks is driven by the high interest of the public to place their funds in Islamic banks because the products of Islamic banking funds have an appeal to depositors considering the profit-sharing ratio and product margins are still competitive compared to interest in conventional banks
Sign-in/Register to view highlights & summary 
Published Version (
Free)
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call