Intellectual capital and islamic corporate social responsibility on the financial performance of sharia commercial banks in Indonesia

Fauzi Mahdi,Julkarnain Julkarnain,N Fadli,D.H Yen,Zulkarnain Zulkarnain,Heny Ningsih Triastuti Kurnia,Azwansyah Habibie,Rahayu Sri,M.N Badu,Muhammad Muhammad,M Irham,H.A Haridhi,Syafruddin Syafruddin,Z Md Nor,Muhammadar Muhammadar

doi:10.1051/e3sconf/202233905003

Abstract

This study aims to examine Intellectual Capital, Islamic Corporate Social Responsibility on the Financial Performance of Islamic Commercial Banks in Indonesia based on the Islamicity Performance Index. The dependent variable is the Financial Performance of Islamic Commercial Banks in Indonesia based on the Islamicity Performance Index. The independent variables used in this study are Intellectual Capital and Islamic Corporate Social Responsibility. The population in this study is 14 Islamic banking companies. The sampling technique used purposive sampling, as many as 8 Islamic banking 2016-2019. The data were analyzed using Partial Least Square (PLS) tools. General Sharia based on Islamic City Performance Index with indicators of Equitable Distribution Ratio and Profit Sharing Ratio. Islamic Corporate Social Responsibility has no effect on the Islamic City Performance Index with indicators of Equitable Distribution Ratio and Profit Sharing Ratio.

Highlights

Since their inception in the mid-1970s, Islamic banks have expanded into the majority of the world's financial markets
Based on the theoretical point of view of Islamic banks, based on the principle of profit and loss sharing, instead of interest-bearing deposits or loans found in conventional banks, two conflicting legal views emerge in modern Islamic banks
2.1 Population and Sample In the study, the population is recorded in the Islamic banking Financial Services Authority (FSA) from 2016 to 2019

Summary

Introduction

Since their inception in the mid-1970s, Islamic banks have expanded into the majority of the world's financial markets. Based on the theoretical point of view of Islamic banks, based on the principle of profit and loss sharing, instead of interest-bearing deposits or loans found in conventional banks, two conflicting legal views emerge in modern Islamic banks. According to conventional financial practice, the Islamic banking system should change the old contract by strictly incorporating Islamic business practices and social responsibility into banks [1]. The objective of Islamic banks is to promote and develop the application of Islamic principles in financial, banking and related business transactions. Management of Islamic banks eliminates cruelty and injustice in the financial system due to usury and ensures economic development by introducing halal businesses [2]. Islamic banks are better in deposit growth business development, profitability, liquidity and solvency, asset quality, capitalization solvency of financial stability, risk, cash, cash deposits ratio and financial stability [3]; [4]

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