Profitability Of Islamic Banks Research Articles

The impact of corruption on the performance of Islamic banking in the United Arab Emirates: empirical evidence by using static panel analysis

Purpose- The major objective of this paper was to scrutinize the impact of corruption control on Islamic banking performance in the United Arab Emirates. So the performance of Islamic banks was determined by the profitability as a specific objective of this study. Methodology- Panel data was grounded on quantitative analysis applied. Also, the study collects data from secondary sources from 2000 up to 2019. The sample of this paper comprised a total of 18 banks that were selected in the UAE. Data were collected from the World Bank data set and annual financial reports for each selected bank. The study analyzed the data based on descriptive statistic, correlation matrix, and static models which includes pooled OLS model, random effect, and fixed effect to achieve the study objective. So, results were presented in the form of tables for descriptive analyses of the key variables applied, correlation as well as static models. The static model that was applied for this study provides the uniqueness of this paper because most of the previous corresponding studies did not employ a static model but used a dynamic model especially the Generalized Method of moment (GMM). So, the originality of this study firstly, it is the earliest study that used a static model, and secondly, this study may be the first to look at the impact of corruption control on Islamic bank's profitability. This is because most of the study is based on the impact of corruption and not corruption control like this study. Findings – The findings have shown that corruption control and bank profitability have a statistical correlation relationship and its coefficient revealed a positive association which indicates that in the UAE control of corruption would increase the profitability of Islamic banks. The discussions of the findings show that some previous studies are consistence with the study while others are inconsistent. The results of this implied that the Islamic bank flourish and benefit from the corruption-controlling strategies that existed in UAE. Conclusion – The study recommends that in UAE and other countries the zero-tolerance policy for corruption mitigation and eradication is a perfect way, efforts should take and should be achievable right now. So alternative way to expression at this is in terms of Islamic finance should not tolerate non-Shariah compliant elements and any element of the practice of corruption. So, the strong practice of corruption in the Muslim states and non-Muslim states hinders the progress of Islamic financial institutions (IFIs). From these results, Islamic finance should insist on the application of its principles for every Industry that offers Islamic finance products and services.

Profitabilitas pada bank umum syariah dan peran biaya intermediasi, capital adequacy ratio, pembiayaan mudharabah, financing to deposit ratio, dan dana pihak ketiga

This study aims to determine the effect of bank intermediation costs, capital adequacy ratio, mudharabah financing, financing-to-deposit ratio, and third-party funds on profitability in Islamic commercial banks for the 2016-2020 period. This research type is quantitative, while the analysis method uses multiple linear regression. The results of this study indicate that intermediation costs significantly positively affect profitability (return on assets). In contrast, the capital adequacy ratio, mudharabah financing, financing-to-deposit ratio, and third-party funds do not affect the profitability of Islamic commercial banks.

Pengaruh Tingkat Risiko Pembiayaan terhadap Profitabilitas Bank Umum Syariah

This study aims to determine the level of financing risk to the profitability of Islamic commercial banks. This study uses data from the financial statements of Islamic commercial banks that have been audited and published to the public through the official website of the financial services authority. The author uses a quantitative descriptive type of research; the analysis method in this study is a simple linear regression analysis. The sample determination technique used with purposive sampling techniques is to select samples based on certain criteria based on the purpose of the study. The results showed that there was a significant negative relationship between NPF and ROA. The relationship is a cause-and-effect relationship, so the ROA value is inversely proportional to the NPF. In this study, the size of the ROA value was influenced by NPF. It can be concluded from this study that there is a significant negative relationship between NPF and ROA. The relationship is a cause-and-effect relationship, so the ROA value is inversely proportional to the NPF.
 Keywords: Profitability, Financing Risk level

PERAMALAN PROFITABILITAS PERBANKAN SYARIAH INDONESIA: STUDI BANK RAKYAT INDONESIA SYARIAH PRA MERGER TAHUN 2010-2020

This study aims to determine the performance of return on assets, the ratio of operating expenses to operating income, return on equity, and non-performance Financings in the next 10 years. This research method uses a quantitative descriptive method to predict the growth of Islamic banking profitability. The population and sample used in the pre-merger study of Bank Rakyat Indonesia Syariah. The data used is financial reports for ROA values every year from 2010-2020. The research results show that there has been a decline in the profitability of Bank Rakyat Indonesia Syariah. This is shown by the prediction of a decrease in ROA, BOPO, ROE and NPF. The decision to merge with Bank Syariah Indonesia was the right decision because it can be seen from the growth rate of BRIS' profitability that tends to decrease every year.

ASYMMETRIC CAUSAL LINKAGES BETWEEN LIQUIDITY AND PROFITABILITY FOR MENA ISLAMIC BANKS

This paper investigates the impact of liquidity on Islamic bank profitability. We examine the existence of asymmetric causal linkages or structural shifts in the profitability-liquidity nexus for a sample of 34 Islamic banks in the Middle East and North Africa (MENA) countries over the period 2005-2017 using the Panel Threshold Regression and controlling for the bank-specific and macroeconomic variables. Empirical evidence highlights a non-linear relationship between liquidity and Islamic bank profitability. Indeed, there is a significant negative relationship between liquidity and profitability if the ratio of loan/total assets does not exceed the threshold. Contrariwise, liquidity positively affects profitability. Furthermore, the empirical evidence shows that bank size is adversely related to banks’ profitability given the economies of scale issues of Islamic banks. The CAR impact is well emphasized above and below the threshold. We highlight that Islamic banks face a trade-off between liquidity and profitability. They are recommended to strengthen the liquidity risk management instruments to improve their profitability notably within a framework of Basel III liquidity requirements to maintain adequate high-quality liquid assets.

THE SECTORAL FINANCING DIVERSIFICATION AND THE PROFITABILITY OF ISLAMIC BANKING IN INDONESIA

This study investigates the influence of sectoral financing concentration on the profitability of Islamic banking in Indonesia. The data is aggregated by Indonesian Islamic banks from January 2015 to June 2021. Islamic banks are divided into two, namely Islamic commercial banks and Islamic window banks. The study used Autoregressive distributed lag (ARDL) and Panel Mean Group (PMG). The results showed that sectoral financing concentration increased the profitability of Islamic commercial banks while diversification of sectoral financing boosted the profitability of Islamic window banks. In addition, this study also showed that size and inefficiency negatively affected the profitability of Islamic commercial banks and window banks. This result implies that the right sectoral financing policy for Islamic commercial banks is financing concentration. This strategy implies that Islamic commercial banks must build competitiveness in certain sectors of the economy. For this reason, there is a need to increase the skills of the worker to build a competitive advantage in the sector that is the focus of financing. In comparison, sectoral financing diversification is more applicable for Islamic window banks. To support this diversification strategy, banks must conduct good supervision in the financing, especially sectoral financing based on profit-sharing contracts.

Analisis Pengaruh Pembiayaan Murabahah, Pembiayaan Musyarakah Dan Sertifikat Bank Syariah (Sbs) Terhadap Profitabilitas Dengan Struktur Modal Sebagai Variabel Intervening Pada Perbankan Syariah Di Indonesia

This study aims to determine how influential Murabahah financing, Musyarakah financing and Bank Syariah Certificates (SBS) are on profitability with the Mode Structure as an intervening variable in Islamic banking in Indonesia. The population in this study were Islamic banks in Indonesia from 2016 to 2020. While the research sample used was Secondary data on annual accounts of Islamic banks. Data collection techniques are using literature studies, documentation and internet research. Based on the results of this study: Murabahah financing has no effect on the profitability of Islamic banks. Musyarakah financing affects the profitability of Islamic banks. Bank Syariah Certificate (SBS) has an effect on the Profitability of Islamic Banks. Murabahah Financing, Musyarakah Financing and Bank Syariah Certificates (SBS) together have an effect on the Profitability of Islamic Banks. Capital structure is not able to mediate the effect of Murabahah Financing on the Profitability of Islamic Banks. The Capital Structure is not able to mediate Musyarakah Financing on the Profitability of Islamic Banks. Capital Structure is not able to mediate Bank Syariah Certificates (SBS) on the Profitability of Islamic Banks.

Examining the Model of Islamic Bank Profitability: The Roles Islamic Social Responsibility, Firm Size, Leverage, and Board Size

AbstractPurpose - Profitability is very essential for the Islamic banking industry to maintain a sustainable business at a global level. However, until now Islamic banking has not been able to generate profitability competitiveness against conventional banking. Meanwhile, the increased awareness of the importance of business social responsibility has led to increased attention towards social responsibility based on Islamic values (known as Islamic Social Responsibility) since it is believed to be able to boost the profitability of Islamic banking. This study aims to reveal the effect of firm size, leverage, and board size on Islamic social responsibility and the role of Islamic social responsibility in mediating the influence of these three factors on the profitability of Islamic bankingMethodology - Observing 14 Islamic banks in Indonesia, this study used SEM-PLS for data analysis. Findings - The results show that board size has a positive effect on Islamic social responsibility while Islamic social responsibility itself has a positive effect on the profitability of Islamic banking. In addition, Islamic social responsibility can play a good role in linking firm size, board size, and leverage with the profitability of Islamic banking. The implications (theoretical and managerial) of this study are described at the end of the Keywords - Profitability, firm size, board size, leverage, Islamic social responsibility, Islamic banking

Effect of Mudharabah, Musyarakah and Murabahah Financing on Profitability of Islamic Banks Listed on the Indonesia Stock Exchange for the 2018-2020 Period

Based on the objectives of this research, including to determine the effect of mudharabah on profitability in Islamic banks listed on the Indonesia Stock Exchange for the 2018-2020 period. To determine the effect of Musyarakah on Profitability of Islamic Banks Listed on the Indonesia Stock Exchange for the 2018-2020 period. To determine the effect of Murabaha on Profitability of Islamic Banks Listed on the Indonesia Stock Exchange for the 2018-2020 period. The research method used is quantitative. The population is taken from the data of Islamic banking companies listed on the Indonesia Stock Exchange for the 2018-2020 period. The sampling is Saturated Sampling. The population has 42 financial reports from 14 Islamic banking companies multiplied by 3 years. Data retrieval is done by using documentation taken from the financial statements. This study uses data analysis, namely multiple linear analysis with the SPSS (Statistics Program For Social Science) program and hypothesis testing using the t test. The results show that Mudharabah Financing has a positive and significant effect on profitability in Islamic banking companies. Musyarakah financing has a positive and significant effect on profitability in Islamic banking companies. And Murabahah Financing has a positive and significant effect on profitability in Islamic banking companies.

Pengaruh Faktor Makroekonomi terhadap Profitabilitas BUS: Studi pada Bank Umum Syariah di Indonesia yang Terdaftar Dalam OJK Periode 2018-2020

The purpose of this study is to determine the impact of inflation, exchange rates, and Gross Domestic Product (GDP) on the profitability of Islamic banking which in this study uses the ratio of Return on Assets (ROA) and Return on Equity (ROE). The object of research is 11 Islamic Commercial Banks that publish their financial reports to the Otoritas Jasa Keuangan for the period 2018-2020. The data used include quarterly statistics compiled from the websites of Bank Indonesia, the Badan Pusat Statistik, and Otoritas Jasa Keuangan from 2018 to 2020. The research was conducted using a quantitative methodology. After testing, it was found that inflation, exchange rate, and GDP simultaneously did not have a significant effect on ROA and ROE. Partially the exchange rate and GDP have a significant impact on ROA and ROE, but inflation does not.
 Keywords: Inflation, Exchange Rate, GDP, ROA, ROE

Impact of Global Financial Crisis on Islamic Banks of Pakistan

This study aims to compare the financial performance of conventional and Islamic banks, which remains a widely discussed topic after the latter’s development. Literature review suggests that Islamic banks outperformed conventional banks during the global financial crisis of 2008. The collected data supports the premise that the crisis of 2008 had no impact on Islamic banks. This empirical study tests this hypothesis and compares the ratios and stock prices between re, During and post crisis time period of full-fledged Islamic banks operating in Pakistan by conducting ratio analysis. It includes three study periods namely pre-crisis (2006), during crisis (2007-2009), and post-crisis (2010-2020). The findings states that the ratios and stock prices remain unchanged during the crisis. Through the application of Univariate Analysis of Variance (UAV), this study asserts that the asset turnover ratios of banks and stock return remained unaffected by the crisis. In contrast, Islamic banks profitability, efficiency, risk management, liquidity, asset quality, and Earning per share ratios were extensively affected by the said crisis.

Analisis Pengaruh GDP, Inflasi, CAR, Dan NPF Terhadap Profitabilitas Perbankan Syariah Di Indonesia

This study analyzes the independence of the variables that affect the profitability of Islamic banking, such as Gross Domestic Product (GDP), Inflation, Capital Adequacy Ratio (CAR), and Non-Performing Financing (NPF). This study uses secondary data in time series with samples from January 2015 to August 2021 in Indonesia and applies a quantitative approach with the method Vector Error Correction Model (VECM). This study found that in the long term GDP and inflation variables have a positive and significant effect on the profitability of Islamic banking in Indonesia, while the CAR and NPF variables do not affect the profitability of Islamic banking in Indonesia. In the short term, the NPF variable affects the GDP variable and the ROA variable affects the inflation variable. Based on the results of this study, shows that macroeconomic variables play an important role in the development of Islamic banking profitability in Indonesia. This study suggests that to increase the profitability of Islamic banking in Indonesia. Islamic banking needs to pay attention to the influence of macroeconomic variables and the management of Islamic banking operational performance.

Macro Economy Effect On Islamic Banking Profitability In Indonesia

This research is interesting to know the effect of macroeconomic conditions (BI Rate, Exchange Rate and inflation) on the profitability of Indonesian Islamic banking. The population in this study is the financial statements of Indonesian Islamic banking, the sample is the data in 2014-2018. The sampling technique using purposive sampling. This research resulted that indicate inflation does not affect the profitability of Indonesian Islamic banking. While an exchange rate has a positive significant effect on Islamic banking. While the BI Rate has negative significant effect on profitability.

Determinant of Indonesian Islam Bank’s Profitability: Lessons from the BRI Syariah case

Profit is the main key to the success and sustainability of Indonesian Islamic banks that join the banking industry in Indonesia as the last players. This study investigates the profitability of Islamic banks in Indonesia for the BRI Syariah case. Islamic banks' profitability is measured by two measurements, namely Return on Assets (ROA) and Return on Equity (ROE). This study uses the well-known Autoregressive Distributed lag model (ARDL) as a dynamic time series regression method using quarterly data from 2009Q1 to 2020Q4. The explanatory variables are asset, capital adequacy ratio (CAR), financing, cost-income ratio (CIR) and GDP. The findings indicate that specific bank variables and macroeconomic variables influence profitability. Size, CAR, and financing have a negative effect on profits while operating inefficiency has a negative effect on profits. This finding also shows that high economic growth will boost the profits of Islamic banks.

Pengaruh Pembiyaan Murabahah, Mudharabah, Musyarakah dan Istishna terhadap Profitabilitas Bank Syariah di Indonesia dan Malaysia

This study aims to examine and analyze the effect of murabahah, mudharabah, musyarakah and istishna financing on the profitability of Islamic Commercial Banks in Indonesia and Malaysia. This study uses quantitative research methods with an associative approach. The data used is in the form of annual reports of Islamic Commercial Banks from the 2013-2020 period. The samples used were 6 Islamic banks which were taken by purposive sampling from 30 Islamic Commercial Banks in Indonesia and Malaysia. The data analysis technique used is multiple linear regression with a fixed effect model, which is operated with the Eviews 9.0 application. The results showed that partially murabahah and mudharabah financing had a significant effect on profitability, while musyarakah and istishna financing did not have a significant effect on profitability. Simultaneously the financing of murabahah, mudharabah, musyarakah and istishna has a significant effect on profitability.

The Moderating Role of Profit and Loss Sharing in the Relationship Between Marketability and Profitability in Islamic Commercial Banks in Indonesia

The problem phenomenon in this study is the low growth of marketability, profitability, profit and loss sharing of Islamic banks in 2014-2019. This study aims to analyze the factors that influence the profitability of Islamic commercial banks in Indonesia for the period 2014-2019. This research method uses quantitative with secondary data sources. The results of the study of factors that have a significant positive effect are Profit and loss sharing on profitability with a t-count value of 6.13091 > t-table 1.645. Marketability to profitability with t-count of 2.00583 > t-table 1.645 and which has a significant negative effect. Marketability on profit and loss sharing t-count 6.80506 > t-table 1.645 and original sample coefficient 1 -0.35806.

PROFITABILITY OF SHARIA BANKING BEFORE AND DURING COVID-19 PANDEMIC (EVIDENCE FROM PT. BANK MUAMALAT INDONESIA TBK.)

The Covid-19 pandemic has impacted many sectors including the Islamic Banking sector. This study aims to analyze the profitability of Islamic banking before and during the Covid-19 pandemic, a case study at Bank Muamalat Indonesia (BMI). The research indicators used are banking financial ratios in the form of ROA (Return on Assets), ROE (Return on Equity), BOPO (Operating Agency to Operating Income), NOM (Net Operating Margin), and EPS (Earning Per Share). The research method used is a comparative study with a quantitative approach using data from Quarter I to IV financial statements for 2019 - 2020. The results show that there is no significant difference in the profitability of BMI before and during the Covid-19 pandemic seen from ROA, ROE, BOPO, NOM, and EPS.

Profitabilitas Bank Syariah Di Indonesia: Bagaimana Pengaruh Permodalan, Inflasi Dan Birate?

This study to analyze the effect of internal components of Islamic banks and macroeconomics on the profitability of Islamic banks in Indonesia. The sample used includes 8 Full Fledge Islamic banking for the period 2011Q1–2019Q4. Data analysis used panel data regression between FEM and CEM based on Chow and LM tests. Several control variables used include financing quality (NPF), bank liquidity (FDR), exchange rate and economic growth (LGDP). The robust model was chosen for further analysis and the best model was obtained, namely FEM-cross section weight (EGLS). The results found that Islamic banks are increasingly complying with sharia regulations where the BI Rate does not affect the profitability of Islamic banks. Inflation has a negative effect, while the effect of CAR has a non-linear effect on profitability. All control variables have a significant effect on the profitability of Islamic banks. NPF and exchange rate have a negative effect while EG and FDR have a positive effect on profitability. The results of the FEM constant show that there are 2 Islamic banks that excellent in profit so that they can be a reference for other Islamic banks to increase profitability.

Analisis Pengaruh Green Banking Terhadap Profitabilitas Bank Umum Syariah Indonesia

Research Aims: Islamic commercial banks are Islamic banks which in their activities provide services in payment traffic. Islamic commercial banks can operate as foreign exchange banks and non-foreign exchange banks. Foreign exchange bank is a bank that can carry out transactions abroad or related to foreign currencies as a whole, such as transfers abroad, collections abroad, opening letters of credit and so on. The purpose of the study was to determine the effect of green banking on the profitability of Islamic commercial banks in Indonesia and the concept of green banking in an Islamic perspective. Design/methodology/approach: This type of research is quantitative with a descriptive statistical approach, the research methodology used in this study is the method of documentation and literature study. Research Findings: The results of the study show that green banking has a positive effect on the profitability of Islamic Commercial Banks in Indonesia. In the Islamic perspective, all Green Banking Indicators are in accordance with the Islamic perspective as well as the reinforcing arguments about protecting nature and preventing natural damage. Keywords: Green Banking, profitibalitas, Bank Umum Syariah.

Effect of Financing to Deposit Ratio (FDR), Net Operating Margin (NOM), and Efficiency to Profitability of Islamic Banks in ASEAN

Abstract. Introduction. Profitability is a comparison that can be used to measure a company's ability to generate profits in general business activities. The main factors in increasing profitability are aspects of liquidity, efficiency and revenue sharing. Purpose. This study aims to discuss how the influence of the distribution of Third Party Funds (DPK), Efficiency, and Interest Income on the Profitability of Islamic Banks. This study uses the variables of Financing to Deposit Ratio (FDR), Net Operating Margin (NOM), and Efficiency as measured by BOPO (Operating Costs and Operating Income) to Profitability as measured by ROE (Return On Equity) in Islamic banking in Indonesia and Malaysia. The sample in this study consisted of 5 Islamic banking companies in the Southeast Asian region. The population of this study is Islamic banking companies taken from the publications of the ASEAN Islamic Bank for the period 2014 to 2019. The statistical test tool in this study is Eviews 9 which is used for panel data regression testing. Results. This study shows that the variable operating costs and operating income (BOPO) has a negative and significant effect on Return On Equity (ROE). while the variables Financing to Deposit Ratio (FDR) and Net Operating Margin (NIM) have a negative and insignificant effect on Return On Equity ROE. Conclusions. In this study efficiency has a significant effect on profitability as measured by ROE.