IDEAS home Printed from https://ideas.repec.org/a/rbs/ijbrss/v10y2021i2p228-237.html
   My bibliography  Save this article

Performance analysis of sharia commercial banks in Indonesia before the covid pandemic period (2015-2019)

Author

Listed:
  • Erna Handayani

    (Universitas Muhammadiyah Purwokerto, Jl. KHA Dahlan 103 Purwokerto 53182, Indonesia)

  • Alni Rahmawati

    (Universitas Muhammadiyah Yogyakarta, Tamantirto, Kasihan, Yogyakarta 55183, Indonesia)

  • Naelati Tubastuvi

    (Universitas Muhammadiyah Purwokerto, Jl. KHA Dahlan 103 Purwokerto 53182, Indonesia)

  • Ira Hapsari

    (Universitas Muhammadiyah Purwokerto, Jl. KHA Dahlan 103 Purwokerto 53182, Indonesia)

Abstract

Overcoming the impact of the Covid pandemic on Islamic banking in Indonesia, management must take strategic steps based on predictions and previous performance identification. Identify performance, information on the factors that affect the performance of Islamic banking in Indonesia is needed. Several aspects that are considered to affect Islamic banking performance that management must consider are capital, liquidity aspects, credit risk, and efficiency. This research examines the influence of the aspects of capital (Capital Adequacy Ratio and Third Party Funds), liquidity (Finance to Debt Ratio ), credit risk (Non-Performing Financing).) and operational efficiency (BOPO) on the performance of Islamic banking in Indonesia 5 (five) years before the Covid pandemic occurred in Indonesia (2015-2019). The results showed that these five aspects had a simultaneous effect on Islamic banking performance in Indonesia, with a termination coefficient of 94.4%. Of the five variables, CAR, FDR, NPF, and BOPO significantly affect performance, while TPF has no significant effect on performance (Return on Assets). Key Words: Performance, Islamic Banking, Bank Health Ratio, Return on Asset, Capital Adequacy Ratio, Non Performing Financing, Third Party Funds

Suggested Citation

  • Erna Handayani & Alni Rahmawati & Naelati Tubastuvi & Ira Hapsari, 2021. "Performance analysis of sharia commercial banks in Indonesia before the covid pandemic period (2015-2019)," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 10(2), pages 228-237, March.
    • Handle: RePEc:rbs:ijbrss:v:10:y:2021:i:2:p:228-237
    DOI: 10.20525/ijrbs.v10i2.1010
    as

    Download full text from publisher

    File URL: https://www.ssbfnet.com/ojs/index.php/ijrbs/article/view/1010/818
    Download Restriction: no
    File URL: https://doi.org/10.20525/ijrbs.v10i2.1010
    Download Restriction: no
    File URL: https://libkey.io/10.20525/ijrbs.v10i2.1010?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Faisal Abbas & Shahid Iqbal & Bilal Aziz, 2019. "The impact of bank capital, bank liquidity and credit risk on profitability in postcrisis period:‎ A comparative study of US and Asia," Cogent Economics & Finance, Taylor & Francis Journals, vol. 7(1), pages 1605683-160, January.
    2. Dhiaa Shamki & Ibrahim Alulis & Karima Sayari, 2016. "Financial Information Influencing Commercial Banks Profitability," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 8(6), pages 166-166, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Nazish Iftikhar & Nadeem Iqbal & Hasan Hanif, 2021. "The Nexus among Competition, Risk and Performance in Banking Sector of Saudi Arabia," Journal of Economic Impact, Science Impact Publishers, vol. 3(3), pages 196-201.
    2. Lubberink, Martien, 2022. "Max headroom: Discretionary capital buffers and bank risk," International Review of Financial Analysis, Elsevier, vol. 84(C).
    3. Michael Adusei, 2022. "The liquidity risk–financial performance nexus: Evidence from hybrid financial institutions," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(1), pages 31-47, January.
    4. Faisal Abbas & Omar Masood & Shoaib Ali & Sohail Rizwan, 2021. "How Do Capital Ratios Affect Bank Risk-Taking: New Evidence From the United States," SAGE Open, , vol. 11(1), pages 21582440209, January.
    5. Apostolos Dasilas & Goran Karanovic, 2023. "The Impact of Internet Finance on Bank Profitability. Evidence from The Chinese Commercial Banks," Journal of Accounting and Management Information Systems, Faculty of Accounting and Management Information Systems, The Bucharest University of Economic Studies, vol. 22(4), pages 591-608, December.
    6. Faisal Abbas & Zahid Irshad Younas, 2021. "How Do Bank Capital and Capital Buffer Affect Risk: Empirical Evidence from Large US Commercial Banks," Journal of Central Banking Theory and Practice, Central bank of Montenegro, vol. 10(2), pages 109-131.
    7. Mohammad Motasem ALrfai & Danilah Binti Salleh & Waeibrorheem Waemustafa, 2022. "Empirical Examination of Credit Risk Determinant of Commercial Banks in Jordan," Risks, MDPI, vol. 10(4), pages 1-11, April.
    8. Jonas Ladime & Rayenda Khresna Brahmana, 2021. "Role of controlling shareholders on the performance of efficient African banks," African Development Review, African Development Bank, vol. 33(2), pages 316-328, June.
    9. Rana M. Airout & Qasim A. Alawaqleh & Nashat A. Almasria & Fahd Alduais & Sonia Q. Alawaqleh, 2023. "The Moderating Role of Liquidity in the Relationship between the Expenditures and Financial Performance of SMEs: Evidence from Jordan," Economies, MDPI, vol. 11(4), pages 1-22, April.
    10. Zou, Fei & Huang, Lingyu & Ghaemi Asl, Mahdi & Delnavaz, Mohammad & Tiwari, Sunil, 2023. "Natural resources and green economic recovery in responsible investments: Role of ESG in context of Islamic sustainable investments," Resources Policy, Elsevier, vol. 86(PA).
    11. Rim Boussaada & Abdelaziz Hakimi & Majdi Karmani, 2022. "Is there a threshold effect in the liquidity risk–non‐performing loans relationship? A PSTR approach for MENA banks," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 27(2), pages 1886-1898, April.
    12. Ahmed Nourrein Ahmed Mennawi, 2020. "The Impact of Liquidity, Credit, Financial Leverage Risks on Financial Performance of Islamic Banks: The Case of Sudanese Banking Sector," International Journal of Applied Economics, Finance and Accounting, Online Academic Press, vol. 8(2), pages 73-83.
    13. Jamshid ur Rehman & Khalid Hussain & Ishfaq Ahmed & Abdul Latif & Roman Ullah, 2024. "Nexus between Corporate Governance and Bank ‘Risks: Insight from the Commercial Banks in Pakistan," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 13(2), pages 877-883.
    14. Niluthpaul Sarker & Roushanara Islam, 2021. "Issues on Bank’s Capital Structure and Profitability: A Developing Country Context," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(1), pages 86-104.
    15. Khalfaoui Hamdi & Guenichi Hassen, 2021. "Economic policy uncertainty effect on credit risk, lending decisions and banking performance: evidence from Tunisian listed banks," Journal of Economic and Administrative Sciences, Emerald Group Publishing Limited, vol. 38(2), pages 287-303, February.
    16. Faisal Abbas & Shoaib Ali & Imran Yousaf & Wing-Keung Wong, 2021. "Dynamics of Funding Liquidity and Risk-Taking: Evidence from Commercial Banks," JRFM, MDPI, vol. 14(6), pages 1-16, June.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:rbs:ijbrss:v:10:y:2021:i:2:p:228-237. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Umit Hacioglu (email available below). General contact details of provider: https://edirc.repec.org/data/ssbffea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.