Abstract
This study intends to provide an overview of the consistency of research results with theoretical and empirical points of view, it is done because many research results are inconsistent with the theory. Quantitative research methods are used to make generalizations using a sample of 14 Islamic Commercial Banks in Indonesia with time series data collection techniques for 5 years. The data analysis technique used is multivariate analysis using the Warp PLS structural equation model. The results showed that the level of profitability of Islamic banks is always overshadowed by the occurrence of credit risk that causes non-performing financing from financing of the type of natural uncertainty contracts because it is type of financing is a financing that does not provide certainty of results. The results of this study are consistent with agency theory that explains the existence of information asymmetry, and consistent with the theory of mixing that by providing opportunities to manage business to business managers (mudharib/mustyarik) without interference from the owner of the fund (shaibul maal) can lead to the risk of default and thus affect the ability of Islamic banks to obtain profitability.
Highlights
Much research has been done on mudharabah financing and musyarakah financing related to the profitability level of Islamic banks, but it has not provided certainty as a guideline that the results of the research can be used as a consistent reference considering the results of the research are limited to giving an explanation of influence or not, so as not to give an overview of suitability point view by theory
This study will provide research results that provide an overview from the perspective of the theory used so as to provide empirical and theoretical analysis of the profitability of Islamic banks through non-performing financing with financing types of natural uncertainty contracts
Operational Variables Exogenous Variables (X1) Exogenous variables in this study are Natural Uncertainty Contracts (NUC) which is a type of financing that does not yet have a certainty of the results made with mudharabah financing (X1.1) and musyarakah financing (X1.2)
Summary
Much research has been done on mudharabah financing and musyarakah financing related to the profitability level of Islamic banks, but it has not provided certainty as a guideline that the results of the research can be used as a consistent reference considering the results of the research are limited to giving an explanation of influence or not, so as not to give an overview of suitability point view by theory. This study will provide research results that provide an overview from the perspective of the theory used so as to provide empirical and theoretical analysis of the profitability of Islamic banks through non-performing financing with financing types of natural uncertainty contracts. Funding provided by Islamic banks based on sharia principles is in accordance with the type of tijarah contracts, which is a contract intended to obtain benefits (Nurhayati & Wasilah, 2015). It is becomes a business scheme of an Islamic bank in obtaining benefits with natural certainty contracts and natural uncertainty contracts (Karim, 2010). Until now the financing that has a dominance in the operations of Islamic banks is murabahah contract, research shows that the largest contribution of financing is from financing of murabahah contract and which does not contribute is the salam contract financing (Iskandar, 2016)
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