Open AccessFACTORS AFFECTING THE PROFITABILITY OF SHARIA BANKING
Author(s) -
Aris Supriadi,
Agus Ismaya Hasanudin,
Lia Uzliawati,
Anggi Haerani
Publication year - 2021
Publication title -
jurnal ekonomi, bisnis dan entrepreneurship
Language(s) - English
Resource type - Journals
eISSN - 2443-0633
pISSN - 2443-2121
DOI - 10.55208/jebe.v15i1.209
Subject(s) - profitability index , capital adequacy ratio , business , corporate governance , finance , risk adjusted return on capital , financial system , economics , financial capital , human capital , profit (economics) , capital formation , microeconomics , economic growth
This study aims to examine the factors that affect the Profitability of Islamic banking, such as Corporate Governance (CG), Financing to Deposit Ratio (FDR), Non-Performing Financing (NPF), and Capital Adequacy Ratio (CAR). This research is quantitative. The type of data used in this research is secondary data. Data processing using the multiple linear regression approach. The results showed that Corporate Governance had a significant positive effect on Profitability. Financing to Deposit Ratio has a significant positive effect on Profitability. Non-Performing Financing has a significant negative effect on Profitability. Capital Adequacy Ratio has a significant positive effect on Profitability. Corporate Governance has a positive effect on the Capital Adequacy Ratio. Financing to Deposit Ratio does not have a positive effect on the Capital Adequacy Ratio. Non-Performing Financing has a significant positive effect on the Capital Adequacy Ratio. Corporate Governance does not have a positive effect on Profitability through the Capital Adequacy Ratio. Financing to Deposit Ratio has an effect on Profitability through the Capital Adequacy Ratio. Non-Performing Financing has no effect on Profitability through the Capital Adequacy Ratio. Increasing banking profits, the banking management can take measures such as keeping the NPF in a safe position, maintaining the quality of productive assets, planning and arranging credit evaluations more carefully and selectively by using the principle of prudence.