Open AccessAssessing the Profitability of Islamic Banks: The Role of Bank Age and Bank Performance
Author(s) -
Nik Haryati,
Dian Imanina Burhany,
Dwi Suhartanto
Publication year - 2019
Publication title -
iop conference series. materials science and engineering
Language(s) - English
Resource type - Journals
eISSN - 1757-899X
pISSN - 1757-8981
DOI - 10.1088/1757-899x/662/6/062014
Subject(s) - profitability index , nonprobability sampling , profit (economics) , profit sharing , business , islam , publication , variables , finance , economics , financial system , microeconomics , statistics , advertising , population , philosophy , demography , theology , mathematics , sociology
This study examines the effect of bank age and bank performance on the profitability of Islamic banks. The dependent variable in this study is profitability, while the independent variables are bank age, and bank performance. In addition, profit distribution is treated as an intervening variable. The sampling method used was purposive sampling where samples were taken with the provisions of 12 Public Islamic banks that publish annual reports from 2015 to 2017. The results of the data analysis show that bank age does not have a significant effect on profit ability, but NPF (Non-Performing Financing) significant effect on profit sharing. Further, although FDR (Financing to Deposit), and CI (Cost to Income) have no significant effect on profit sharing. Finally, this study also reveals that profit sharing has a significant effect on banks profitability. The implication of theoretical and managerial practices is discussed. Building a competitive advantage to face industry 4.0, one of them with adopting technology is very important for Islamic banking to improve the performance of Islamic banks, improve efficiency and productivity, which will certainly support the performance of profitability.