Islamic Commercial Banks In Indonesia Research Articles

Sharia Compliance and Profitability in Financial Performance Islamic Banks in Indonesia

This study sought to evaluate the financial performance of Islamic commercial banks in Indonesia from 2018 to 2022, with a specific focus on Sharia compliance and profitability. Secondary data taken from the annual reports of commercial Islamic banks during the specified period were used and a descriptive quantitative approach was adopted. The study population consisted of all 13 Islamic commercial banks registered with the Financial Services Authority in 2022; eight banks were chosen as the research sample. The analysis method used encompasses both Sharia compliance and profitability and is called the Sharia Compliance and Profitability Model. For further analysis, the research findings were divided into four quadrants. The results of the study showed how different Islamic commercial banks in Indonesia performed in terms of Sharia compliance and profitability. It identified banks that showed strong adherence to Sharia principles and high profitability, which could be used as benchmarks by other banks to improve their performance. In more detail, The findings of this research included 3 aspects, namely 1) Identification of Sharia Compliance, this study identified the parameters used to assess Sharia compliance, such as compliance with the principles regulated by the Indonesian Ulema Council (MUI) or equivalent Sharia regulatory institutions. The results of this research revealed banks that consistently complied with Sharia principles in their operations and products. This could include banks that had a financial structure that complied with Islamic law, avoids usury, and adhered to the principles of fairness in transactions. 2) Profitability Assessment. Financial analysis has been carried out to assess the profitability of the investigated banks. This could include profitability ratios such as ROA (Return on Assets) and ROE (Return on Equity), as well as the profit growth from year to year. 3) Factors that influenced the Performance as well as the analysis also included an exploration of factors that contributed to bank performance in terms of Sharia compliance and profitability. This could include internal factors such as risk management and operational efficiency, as well as external factors such as market conditions and regulations. The research has practical implications for commercial banks for enhancing performance and adhering to Islamic values in highly profitable banks that strictly adhere to Sharia principles. By examining the connection between Sharia compliance and profitability, this study added to the understanding of the financial performance of Indonesia's Islamic commercial banks.

The Role of Green Banking Implementation in Sharia Banking Performance from an Islamic Perspective

The aim of this research is to determine the effect of implementing green banking on the profitability of Islamic commercial banks in Indonesia and the concept of green banking from an Islamic perspective. This research was conducted at Islamic commercial banks registered with the Financial Services Authority (OJK) for the 2016-2022 period. The population in this study consisted of 12 Islamic commercial banks. The sample selection used a non-probability sampling method with a purposive sampling technique and a sample of 8 Islamic commercial banks with 7 years of observation was obtained so that 56 research data were obtained. The hypothesis testing method in this research uses a panel data regression model with a Fixed Effect Model (FEM) approach using the EViews program. The urgency of this research is to see the impact of implementing green banking on Sharia banking performance, especially from an Islamic perspective. The research results show that Green Banking practices have a negative and insignificant effect on Sharia banking performance.

Determinants Of Islamic Bank Financing During Economic Turbulence

The Covid-19 outbreak has caused turbulence in Indonesia's economic growth, thereby disrupting the performance of Islamic banks, especially in the distribution of financing. This research examines the influence of economic turbulence, third-party deposits, bank size, capital and profitability on financing disbursed by Islamic banks in Indonesia. The population of this research is Islamic commercial banks in Indonesia in the 2017-2022 period. The sample selection used a purposive sampling method and obtained ten Islamic banks. The data analysis technique uses panel data analysis with a fixed effect model. The research results prove that third-party deposits positively and significantly impact financing, while bank size and capital negatively and significantly impact financing. However, economic turbulence and profitability do not affect financing. When financing is divided based on contracts, economic turbulence negatively impacts profit-sharing-based financing, and profitability negatively impacts receivables-based financing. These findings can be a reference for Islamic banks to maintain the availability of third-party deposit funds to support financing expansion and further optimize their capital by channelling it to more productive assets in the form of financing. These findings can complement existing theories and support the business cycle theory that Islamic banks tighten financing based on profit sharing, which carries higher risks.

Inflasi dan Realisasi Pembiayaan Kepemilikan Rumah pada Bank Umum Syariah di Indonesia: Peran Pandemi Covid-19 Sebagai Pemoderasi

This study aims to estimate the realization of home ownership financing at Islamic commercial banks in Indonesia. Yield rate, inflation, and the Covid-19 pandemic are operationalized as predictor variables. In addition, the pandemic is also positioned as a moderating variable between the financing and yield rate, and inflation. Using monthly data for the period June 2014-February 2021, the analytical model used is multiple regression and moderated regression analysis (MRA). The study found that the yield rate and inflation had a negative and significant effect on the financing of home ownership. In contrast, the COVID-19 pandemic has no effect on financing, but this pandemic weakens the negative effect of inflation on home ownership financing

Sharia Board Characteristics, Macroeconomic Factors, and Non-performing Financing of Indonesian Islamic banks

This study examines the impact of Islamic board characteristics (SB) and macroeconomic factors on the Non-performing financing (NPF) of Islamic commercial banks (ICB). The sample of this study consisted of 14 ICBs in Indonesia from 2010 to 2021. In this study, data estimation used a one-step GMM System model. SB features such as SB Size and SB Woman were found to have a detrimental impact on NPF. GDP per capita, for example, negatively affects NPF, while inflation has a positive impact. However, this study could not show the impact of SB characteristics such as expertise and proximity of SB to NPF. The study also found that macroeconomic factors such as annual open unemployment and interest rates showed an insignificant negative influence on NFP. The findings of this study help regulators, investors, and management of Islamic banks better understand the impact of SB characteristics and macroeconomic factors on Non-performing financing (NPF) of Islamic banks, especially in the context of ICB in Indonesia. In addition, it is expected to inspire similar research in the future.

Influence of Internal Factors and External Factors on Non Performing Financing in Islamic Commercial Banks

This study aims to see the effect of the variables Return on Assets (ROA), Capital Adequacy Ratio (CAR), Operating Costs and Operating Income (OCOI), Financing to Deposit Ratio (FDR), inflation and Gross Domestic Product (GDP) on Non-Performing Financing (NPF) for Islamic commercial banks in Indonesia for the 2018-2022 period. This type of research uses quantitative research methods. The analytical tool used is multiple linear regression analysis using E-views version 10 software. The sample in this study is Islamic Commercial Banks in Indonesia. The results showed that simultaneously the variables ROA, CAR, OCOI and FDR had a significant effect on Non-Performing Financing (NPF), while simultaneously, the variables Inflation and GDP did not have a significant effect on Non-Performing Financing (NPF). Partially CAR, OCOI, and FDR have a significant effect on Non-Performing Financing (NPF), whereas ROA, Inflation and GDP have no effect on Non-Performing Financing (NPF). Internal factor variables have an effect of 88.2% on Non-Performing Financing (NPF), while 11.8% are influenced by other variables not examined. External factor variables have an effect of 3.1% on Non-Performing Financing (NPF), while 96.9% are influenced by other variables not examined.

Indonesia Islamic Banks Performance Pre and During Covid-19 Pandemic Based on the Maqāsid Sharīʿah Index

This study try to analyze and compare the performance of Islamic commercial banks pre and during COVID-19 (2018- 2021) based on the Maqāsid ul-sharīʿah index using the Simple Additive Weighting Method (SAW) which was carried out on 11 Islamic commercial banks in Indonesia and to provide deeper information to stakeholders regarding the performance of Islamic commercial banks which are different with conventional bank. The result show that there were eight banks that experienced an increase in Maqāsid ul-sharīʿah performance from the pre-COVID- 19 period, while 3 other banks decreased in terms of performance. On the other hand, when viewed from a rating comparison perspective, there are four banks that have experienced an increase in rating and 3 banks have decreased in terms of rating, while the remaining four banks are at the same rating.

FLUKTUASI KINERJA KEUANGAN PERBANKAN SYARIAH: ANALISIS PADA IMPLEMENTASI PROFIT LOSS SHARING DAN MANAJEMEN RISIKO

Profit Loss Sharing (PLS) plays a crucial role in determining the potential value of profits in Islamic banking. The PLS profit-sharing system indicates the success or failure in the financing investments undertaken by the banks. To generate profits from the financing investments, it is essential to have a reliable and sustainable risk management. In this study, the risk management variable will be comprehensively examined in relation to its impact on supporting the implementation of PLS systems (mudharabah and musyarakah) on financial performance. The analytical method employed is quantitative analysis with the support of the E-Views application program. The research sample includes 11 Islamic commercial banks in Indonesia, with an observation period from 2017 to 2022. The research analysis results demonstrate that mudharabah financing and musyarakah financing have a positive influence on financial performance. Risk management weakens the influence of mudharabah financing and musyarakah financing on financial performance. In terms of direct influence, risk management exerts the strongest impact compared to mudharabah financing and musyarakah financing. Mudharabah financing has the smallest impact on the value of financial performance.

Exploring Contributing Factors to Environmental Disclosures in Islamic Commercial Banks of Indonesia

This study aims to provide an overview and analysis of the influence of policy and corporate governance, including Sharia supervisory board, firm size, firm age, and leverage on green banking disclosure in Islamic commercial banks in Indonesia from 2017 to 2021. This study uses a quantitative approach with panel data regression analysis to examine the causal relationship between the independent variables (policy, board size, board of commissioners, Sharia Supervisory Board, firm size, firm age, and leverage) and green banking disclosures. Islamic commercial banks registered with FSA and IDX are the study population. The sampling method in this study was purposive sampling, with a total sample of six Islamic commercial banks for five years of research. The results of this study show that the company's age, the size of the company, the size of the board of directors, and the board of commissioners have a significant effect on the disclosure of green banking. Meanwhile, Sharia board and leverage do not significantly affect green banking disclosure. This study implies that applying green banking to overcome environmental problems can only be realized by regulation alone, considering the importance of other factors from the bank's side.

The influence of Natural Certainty Contract (NCC) and Natural Uncertainty Contract (NUC) financings on the financial sustainability of Islamic commercial banks in Indonesia

IntroductionResearch on Islamic banking in Indonesia has extensively addressed its performance and stability. However, studies on stability from the perspective of Natural Certainty Contract and Natural Uncertainty Contract financing have been relatively scarce.ObjectivesThis study measures how profitability mediates the impact of Natural Certainty Contract (NCC) financing and Natural Uncertainty Contract (NUC) financing on financial sustainability.MethodThe research utilizes secondary data obtained from quarterly reports for the periods I-IV of 2018-2022 on the official website of Sharia commercial banks. All Sharia commercial banks in Indonesia listed in the OJK for the period 2018-2022 constitute the population for this study, while the sample consists of Sharia commercial banks in Indonesia that meet the criteria. The sampling method employed is purposive sampling, resulting in eight Sharia commercial banks in Indonesia as the sample based on predetermined criteria.ResultsThe findings of this study indicate that NCC financing negatively influences profitability, NUC financing has no impact on profitability, NCC financing positively influences financial sustainability, NUC financing negatively influences financial sustainability, profitability (ROA) positively influences financial sustainability, NCC financing indirectly negatively affects financial sustainability through profitability, and NUC financing indirectly has no impact on financial sustainability through profitability.ImplicationsIslamic commercial banks should be more selective in financing allocation, focusing on options with lower risks. Furthermore, Islamic commercial banks should also manage financing effectively to minimize existing risks, thereby enhancing profitability.Originality/NoveltyThis study contributes to enrich studies in the field of Islamic finance with emphasize on Islamic commercial banks profitability and financial sustainability.

Literature Review: Perkembangan dan Kinerja Bank Umum Syariah di Indonesia Tahun 2014-2023

Purpose: This study investigates the development and performance of Islamic commercial banks in Indonesia from 2013 to the present, focusing on the factors that influence growth and the challenges faced by the Islamic banking sector in supporting economic stability and inclusiveness. Methodology/approach: This research uses a literature review method of 30 previous research articles from the Google Scholar and Research Gate sites, which measure the financial performance of Islamic Banks in Indonesia in terms of profitability during the publication period–2013-2023. Results/findings: This research study reveals that several studies on Islamic Banks in Indonesia use various indicators to measure financial performance and bank health, > 60% of researchers use the variable measurement ratios ROA, ROE, BOPO, CAR, FDR and NPF while the rest some use the LDR, RGEC, NIM, CGC, ETA, EFF, NPL and DPK ratios Limitations: The use of research methods in the form of literature that focuses on the analysis of several previous studies conducted by Google Scholar and ResearchGate can reduce the validity and generality of the research results. The literature review does not involve collecting primary data through observation or experimentation; therefore, the information obtained is descriptive and does not allow the identification of causal relationships. Contribution: Through a careful literature review of previous articles, this study succeeded in identifying the main trends, innovations, and challenges faced by the Islamic banking sector in Indonesia.

Productivity Comparison between Conventional and Islamic Commercial Banks in Indonesia during the COVID-19 Pandemic

This study was conducted to measure and compare the productivity level between conventional and Islamic commercial banks in Indonesia during the COVID-19 pandemic. The number of samples used in this study was 105 banks consisting of 95 conventional banks and 10 Islamic banks. The level of productivity was measured using the Malmquist Productivity Index (MPI) method and Data Envelopment Analysis (DEA) with an intermediation approach, while the productivity of conventional and Islamic commercial banks was compared using normality and different tests. The results showed that the productivity level of the Islamic banks with a Total Factor Productivity Changes (TFPCH) value of 1.001 was driven by technological advances. Meanwhile, the conventional banks were not productive. On the other hand, the results of the different tests showed that there was no significant difference between the productivity level of the conventional and Islamic banks. Conventional banks must enhance innovations in the use of technology in their operational activities to improve their productivity and maintain their high efficiency achievement. Meanwhile, Islamic banks could improve their efficiency in the operational activities so that they would achieve higher productivity and to innovate continually with the use of technology. During the study observation, there was no study comparing between the productivity level of conventional and Islamic commercial banks during the COVID-19 pandemic in Indonesia. Therefore, this research was the first study to discuss the comparison of productivity level between conventional and Islamic commercial banks in Indonesia during the COVID-19 pandemic.

Non-performing Financing and Rate of Return on Mudharaba and Musharaka Contracts of Islamic Banks Before and During the COVID-19 Period

Non-performing Financing and Rate of Return on Mudharaba and Musharaka Contracts of Islamic Banks Before and During the COVID-19 Period

Financial Performance of Islamic Commercial Banks Through Efficiency Levels and Non-Performing Financing Before and During The Covid-19 Pandemic

The real sector and the financial sector have been affected by the Covid-19 pandemic for approximately 2 years. It condition makes the banking financial sector pay attention to the level of operational expenses efficiency and be careful in channeling financing in order to reduce the occurrence of bad financing caused by defaults from customers. Analysis of the capabilities of Islamic banks in Indonesia in terms of operational cost efficiency and managing problematic financing in conditions before and during the Covid-19 pandemic so that the ability of Islamic banks to manage their financial performance will be known is the aim of this research. Saturated sampling was the technique for sampling this research from the research population of 14 Islamic commercial banks in Indonesia. Documentation is used as a technique in collecting data from the combined financial reports of 14 Islamic commercial banks. Data before the pandemic can be seen from the 2018-2019 financial reports, while 2020-2021 data during the pandemic. Paired sample t-test with Jamovi media was used as a data analysis technique. The findings of this research show that during the Covid-19 pandemic, the level of efficiency and non-performing financing of Islamic banks has decreased, meaning that the financial performance of Islamic banks is better and operating costs are more efficient, problem financing is reduced, so that the potential for increased profitability is higher. Keywords: operating expenses and operational income, non-performing financing, financial performance, Islamic banking, covid-19.

Analysis of The Financial Performance of Islamic Commercial Banks Using The Sharia Conformity Method and Profitability Method

It takes a measuring tool that has been adjusted to the concept and practice of Islamic banking a measurement tool that has been adapted to the concept and practice of Islamic banking, namely by assessing the sharia complience side of Islamic banking without ignoring the profitability side. So that the Sharia Conformity and Profitability (SCnP) Model needed. The purpose of this study is to analyze the financial performance of commercial banks using SCnP in 2017-2021. The method used is descriptive quantitative with the data source of the Annual Report of Islamic Commercial Banks downloaded from the official website of each bank. The population in this study were all BUS financial reports registered in OJK. The sampling technique used is purposive sampling with criteria that Islamic commercial banks has the highest level of profitability in 2021 (6 most). The result of this study indicate that measuring the financial performance of Islamic commercial banks using the Sharia Conformity and Profitability (SCnP) method at Islamic commercial banks in Indonesia from 2017 to 2021 shows different result. 2017, 2020, and 2021 are spread across for quadrants. While in 2018 to 2019 it was spread in three quadrants, namlely Upper Left Quadrant (ULQ), Lower Right Quadrant (LRQ), and Lower Left Quadrant (LLQ).

DETERMINANTS OF FACTORS AFFECTING ISLAMIC SOCIAL REPORTING DISCLOSURES

This study aims to determine the effect of Company Size, Company Age, Sales Growth, and Sharia Compliance on Disclosure of Islamic Social Reporting (ISR) (Case Study on Islamic Commercial Banks in Indonesia 2018-2021). The population in this study is Islamic Commercial Banks in Indonesia which have sufficient annual reports for 4 years in the 2018-2021 period. The sample of this study used purposive sampling method and banks that met the criteria were 11 Islamic Commercial Banks so that the total number was 44 samples. The analysis technique used is multiple linear regression analysis with the F test hypothesis test and t test using IBM SPSS 26 as data processing software. The results showed that company size has a positive and significant effect on Islamic Social Reporting (ISR) disclosure. Based on the test results of 4 hypotheses, it can be concluded that company size has a positive effect on the disclosure of Islamic Social Reporting. While company age, sales growth, and sharia compliance have no positive effect on the disclosure of Islamic Social Reporting.

PENGARUH CAR, NPF, DAN GIRO WAJIB MINIMUM TERHADAP PROFITABILITAS DENGAN FDR SEBAGAI VARIABEL INTERVENING

The background of this research because operational costs of Islamic banks are higher than those of conventional banks, where both of them compete with each other to get the desired profit. This study aims to determine the effect of CAR, NPF, and GWM on Return On Assets (ROA) with the Financing to Deposit Ratio (FDR) as an Intervening Variable in Islamic Commercial Banks in Indonesia. This research uses quantitative research methods. Samples were taken from 10 Islamic banks registered with OJK for the period 2017 – 2021. This research uses secondary data, using the Purposive Sampling method. The software used is E-Views 9 using linear regression analysis. The results of the t test show that the Capital Adequacy Ratio variable has a positive effect on profitability. Non-performing financing variables have a positive effect on profitability. The Minimum Statutory Reserves variable has a positive effect on Profitability. Based on the Path Analysis test, FDR was unable to mediate the effect of CAR on ROA. FDR is able to mediate the effect of NPF on ROA. FDR is able to mediate the effect of GWM on ROA.Keywords: CAR; NPF; GWM; ROA; FDR

DOES THE DISCLOSURE OF ISLAMIC CORPORATE SOCIAL RESPONSIBILITY, ISLAMIC CORPORATE GOVERNANCE, PROFITABILITY, AND BANK SIZE AFFECT TAX AVOIDANCE IN ISLAMIC COMMERCIAL BANKS IN INDONESIA?

Abstract— This paper investigates the influence of Islamic Corporate Social Responsibility (ICSR), Islamic Corporate Governance (ICG), profitability, and bank size on tax avoidance in Islamic Commercial Banks in Indonesia. This paper introduces a novel perspective on the factors contributing to tax avoidance within Indonesia's Islamic finance framework. While the general notion of tax management is recognized, this study innovatively explores the intersection of Islamic principles, corporate governance, and tax practices, providing insights that have not been adequately explored in prior research. The study employs a panel data regression analysis, utilizing data from 13 Islamic Commercial Banks spanning 2017-2022, totaling 58 observations. This research approach enables an in-depth investigation into the relationships between ICSR disclosure, ICG, profitability, bank size, and tax avoidance. The empirical findings indicate that ICSR disclosure, the proportion of independent commissioners, and the audit committee positively influence tax avoidance practices. Conversely, the Sharia Supervisory Board and bank size negatively correlate with tax avoidance. Surprisingly, as measured by Return on Assets (ROA), profitability does not significantly impact tax avoidance decisions. This study underscores the intricate connections between Islamic corporate practices, governance structures, and tax avoidance strategies in Islamic Commercial Banks. The research highlights the significance of ICSR disclosure, corporate governance effectiveness, and the presence of religious oversight in shaping transparent and accountable tax practices. Furthermore, the research cautions against overreliance on profitability as a determinant of tax avoidance behaviors.
 Keywords: Bank Size; Islamic Corporate Governance, Profitability; Islamic Corporate Social Responsibility; Tax Avoidance

Effect of Inflation, Exchange Rate, Implementation of Good Corporate Governance (GCG), and Financing to Deposit Ratio (FDR) on Sharia Commercial Bank Financing Risks in Indonesia 2019-2022

The large number of products offered by banks, especially financing,causes greater potential risks that will occur which can be influencedby various factors. Therefore, the aim of this research is to determinethe influence of Inflation, Exchange Rates, Implementation of GoodCorporate Governance (GCG), and Financing to Deposit Ratio (FDR) ininfluencing Financing Risk as proxied by Non-Performing Financing(NPF) in Commercial Banks Sharia in Indonesia 2019-2022. The dataused in the research is secondary data, namely annual financialreports and Good Corporate Governance (GCG) reports for 2019-2022. The population of this research is Islamic commercial banks inIndonesia with a sampling technique, namely purposive sampling. Theregression analysis method used is panel data using Eviews 10. Theresearch results show simultaneously that Inflation, Exchange Rates,Good Corporate Governance (GCG) have a significant effect on Non-Performing Financing (NPF). However, partially it shows that (1)Inflation, Exchange Rates, and Financing to Deposit Ratio (FDR) haveno effect on Non-Performing Financing (NPF), (2) Good CorporateGovernance (GCG) has a significant positive effect on Non-PerformingFinancing (NPF).

Pengaruh Capital Adequacy Ratio, Profit Sharing Ratio terhadap Return On Asset dengan Non Perfoming Financing sebagai Variabel Moderating pada Bank Umum Syariah di Indonesia

This research aims to determine the effect of Capital Adequacy Ratio (CAR), Profit Sharing Ratio (PSR), on Return on Assets (ROA) with Non-Performing Financing (NPF) as a moderating variable in Islamic Commercial Banks in Indonesia. This type of research is quantitative research with the data source used is secondary data. This research uses annual financial report data from Sharia Commercial Banks in Indonesia for 2017-2021. The research sample is Sharia Commercial Banks in Indonesia in 2017-2022. The sample was selected using a purposive sampling technique to obtain seven Sharia Commercial Banks. Data processing and analysis techniques using Descriptive Statistical Analysis, Classic Assumption Test, Multiple Linear Test, Hypothesis Test and MRA Test. The program used for calculations uses SPSS version 25 and then the results from SPSS are interpreted. Capital Adequacy Ratio (CAR) has a significant influence on Return On Assets (ROA). The results of this research show that the Profit Sharing Ratio (PSR) has a significant effect on Return On Assets (ROA). Capital Adequacy Ratio (CAR) and Profit Sharing Ratio (PSR) simultaneously influence Return On Assets (ROA). The R Square (R2) value obtained was 0.441 or 44.1%, indicating that CAR(X1) and PSR (X2) only had an effect of 44.1%. Meanwhile, 55.9% was influenced by other factors outside the research. Non-Performing Financing (NPF) cannot moderate the influence of Capital Adequacy Ratio (CAR) on Return On Assets (ROA). Non-Performing Financing (NPF) cannot moderate the influence of Profit Sharing Ratio (PSR) on Return On Assets (ROA). Non-Performing Financing (NPF) cannot moderate the influence of Capital Adequacy Ratio (CAR) and Profit Sharing Ratio (PSR) on Return On Assets (ROA).