Journal of Finance and Islamic Banking
Full Lenght Article
Analyzing Profitability Determinants in Indonesian Conventional and Islamic Banking
Abstract
This article investigates the impact of financial ratios and macroeconomics on the profitability of conventional and Islamic banks in Indonesia. The study uses financial ratios as internal variables represented by CAR (X1), NPL/NPF (X2), and LDR/FDR (X3), while macroeconomics as an external variable is represented by BI7DRR (X4). The sample design used in this study includes conventional and Islamic banks from BUKU 1 and BUKU 2 in Indonesia, utilizing EViews and SPSS as analysis tools to test the proposed hypotheses. The analysis results show that CAR, NPL, and LDR have significant impacts on the ROA of conventional banks, while BI7DRR does not have a significant effect. On the other hand, in Islamic banks, only CAR and FDR significantly influence ROA, while NPF and BI7DRR do not have significant impacts. A paired sample t-test indicates a significant difference between the profitability (ROA) of conventional and Islamic banks. Based on these findings, it is recommended that conventional banks improve their management of CAR, NPL, and LDR, while Islamic banks need to focus on managing CAR and FDR, and develop innovative Sharia-compliant investment products to attract more stable funds.
Keywords
Declarations
Publisher's Note
Universitas Islam Negeri Raden Mas Said Surakarta remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.
References
Alzoubi, T. (2018). Determinants of bank profitability: Islamic versus conventional banks. Banks and Bank Systems, 13(3), 106–113. https://doi.org/10.21511/bbs.13(3).2018.10
Amalia, S., & Nugraha, N. M. (2021). The Impact of Financial Ratio Indicators on Banking Profitability in Indonesia. In Turkish Journal of Computer and Mathematics Education (Vol. 12, Issue 8).
Amalina, S., Havidzand, H., & Setiawan, C. (2015). The Determinants of TOA (Return on Assets) of Full-Fledged Islamic Banks in Indonesia. In Jurnal MIX: Vol. V (Issue 1).
Amzal, C. (2016). The Impact of Macroeconomic Variables on Indonesia Islamic Banks Profitability Article History. In Jurnal Ekonomi dan Bisnis Islam (Vol. 2, Issue 1).
Azmy, A., Febriansyah, I., & Munir, A. (2019). Equilibrium The Effect of Financial Performance Ratios on Conventional Bank Profitability in Indonesia Stock Exchange 1.14, 84–103.
Baloch, B. A., & Chimenya, A. (2023). Ethical Dimensions Of Islamic Finance And Their Relevance In Contemporary Business Practices. International Journal of Islamic Banking and Finance Research, 32–39. https://doi.org/10.46281/ijibfr.v11i2.2125
Christaria, F., & Kurnia, R. (2016). Accounting and Finance Review The Impact of Financial Ratios, Operational Efficiency and Non-Performing Loan Towards Commercial Bank Profitability. Acc. Fin. Review, 1(1), 43–50. www.gatrenterprise.com/GATRJournals/index.html
Darmawan, J., Akuntansi, J., & Bandung, P. N. (2020). Pengaruh Non Performing Loan dan BI Rate terhadap Return on Asset Pada Bank Umum The effect of non performing loan and BI rate on return on asset commercial bank.
Banter Laksana Dimas Sumitra Danisworo. Indonesian Journal of Economics and Management, 1(1), 174–183. www.ojk.go.id,
Dewi, N. (2019). Analisis Pengaruh Non Performing Financing (NPF), Financing to Deposit Ratio (FDR) dan Biaya Operasional Pendapatan Operasional (BOPO) Terhadap Profitabilitas Pada BNI Syariah di Indonesia Perfiode 2015-2018.
Dwijayanthy dan Prima Naomi, F. (2009). Analisis Pengaruh Inflasi, BI Rate, dan Nilai Tukar Mata Uang terhadap Profitabilitas Bank Periode 2003-2007 Analysis of Effect of Inflation, BI Rate, and Exchange Rate on Bank Profitability (Vol. 3, Issue 2).
Fadjar, A., Esti, H. R., & Prihatini EKP, T. (n.d.). Analisis Faktor Internal dan Eksternal Bank yang Mempengaruhi Profitabilitas Bank Umum di Indonesia
Hasanah, U., Made, A., & Sari, A. (2019). Pengaruh Pembiayaan, Non Performing Financing (NPF), Capital Adequacy Ratio (CAR), dan Financing to Deposit Ratio (FDR) Terhadap Profitablitas Bank Syariah, (Studi Kasus Pada Bank Umum Syariah di Indonesia Tahun 2013- 2017). JURNAL RISET MAHASISWA AKUNTANSI, 7(2). http://ejournal.unikama.ac.id/index.php/jrma
Husnayeni Nahar, F., Faza, C., & Azizurrohman, M. (2020). Macroeconomic Analysis and Financial Ratios on Sharia Commercial Bank Profitability: A Case Study of Indonesia. Journal of Islamic Economics, 3(1), 2622–4798. https://doi.org/10.12928/ijiefb.v3i2.1721
Ikatan Bankir Indonesia; Banker Association for Risk Management (BARa). (2016.; 2016.; 2016.). Manajemen kesehatan bank berbasis risiko / Ikatan Bankir Indonesia. Jakarta :; Jakarta :; Jakarta :; © 2016 Penerbit PT. Gramedia Pustaka Utama: PT. Gramedia Pustaka Utama,; Ikatan Bankir Indonesia (IBI),; Banker Association for Risk Management (BARa),.
Indah Putrianingsih, D., Yulianto Jurusan Manajemen, A., Ekonomi, F., & Negeri Semarang, U. (2016). Pengaruh Non Performing Loan (NPL) dan Capital Adequacy Ratio (CAR) Terhadap Profitablitas. In Management Analysis Journal (Vol. 5, Issue 2). http://maj.unnes.ac.id
Indriastuti Jurusan Akuntansi, M., Dian Pratiwi Jurusan Akuntansi, R., & Dian Nuswantoro, U. (2019). Perbandingan Pembiayaan Bermasalah Antara Bank Syariah dengan Bank Konvensional. In Account (Vol. 6, Issue 1). jm_dc,+07_Chriestie_44-46. (n.d.).
Junaeni, I. (2017). Dominant Variables That Affect The Level of Profitability in Sharia Banks and Conventional Banks. In Jurnal Terapan Manajemen dan Bisnis (Vol. 3).
MALEK, M. A., & RAO, G. V. (2022). Profitability of Islamic Banking – A Study of Select Islamic Banks from Asia. International Journal of Islamic Economics and Finance Studies. https://doi.org/10.54427/ijisef.1027563
Mellaty, F., & Kartawan. (2021). Pengaruh DPK, Inflasi dan Birate Terhadap Profitablitas Bank Umum Syari’ah 2015-2019. JURNAL EKONOMI RABBANI, 01(01), 9–20. http://jurnal.steirisalah.ac.id/index.php/rabbani/index
Nurhadi, M., Dan Angwal, N., & Putra, J. (2017). Financial Performance Analysis of Conventional Banks and Sharia Bank in PT. Bank Panin Syariah Tbk (Vol. 1, Issue 1).
Pada Bank Umum Syariah Yang Terdaftar Di, S., & Khoiriyah, S. (2021). Pengaruh NPF dan FDR Terhadap Profitablitas (ROA) Bank Umum Syariah di Indonesia, Article History (Filled by Journal Manager). In Jurnal Ekonomi Islam (Vol. 12, Issue 1).
Peling, I., & Sedana, I. (2018). 254602-pengaruh-ldr-npl-dan-bopo-terhadap-profi-709ea085. Pengaruh LDR, NPL, dan BOPO Terhadap Profitabilitas pada PT. Bali Periode Tahun 2009-2016, 9(6). https://doi.org/10.24843/EJMUNUD.2018.v7.i06.p6
Pratami, A. F. (2021). Pengaruh CAR, LDR, dan Inflasi terhadap ROA pada Bank Umum yang Terdaftar di BEI The effect of CAR, LDR, and inflation on ROA in commercial banks listed on the IDX. Indonesian Journal of Economics and Management, 1(2), 410–418.
Prima Anindya, A., Aprilianto, F., & Agustin, A. F. (2022). Pengaruh Inflasi, BI Rate, dan Kurs Terhadap Profitabilitas (ROA) Bank Umum Syariah di Indonesia Periode 2012-2021 (Vol. 1, Issue 3). https://ejournal.umm.ac.id/index.php/ijiedi/issue/view/1079
Purnamasari, K., & Ramayanti, T. P. (2019). The Effects of Macroeconomic and Bank Specific Factors on Nonperforming Financing in Sharia Commercial Bank in Indonesia. Global Review of Islamic Economics and Business, 7(2). http://bi.go.id
Raharjo, H., Wijayanti, A., Dewi, R. R., Akuntansi, J., & Ekonomi, F. (2020). Analisis Pengaruh Kinerja Keuangan dan Inflasi Terhadap Profitabilitas Bank Umum Syariah di Indonesia (Tahun 2014-2018). Jurnal Ilmiah Akuntansi Dan Manajemen (JIAM), 16(1).
Ramadhani, F., & Rizkan, M. (2021). Analysis of Internal and External Determinant Variables Towards Profitability of Islamic Banking in Indonesia (2014-2020). In Indonesian Interdisciplinary Journal of Sharia Economics (IIJSE) (Vol. 4, Issue 1).
Redmond, G. & Bonhnsa, C. (2007). Bank size and profitability: one nation, one bank. International of business research. Vol 8. No 1.
Rusydiana, A. S., & Prakoso, D. (n.d.). The Influence of Internal and Macroeconomic Factors on the Profitability of Islamic Commercial Banks in Indonesia. http://journals.smartinsight.id/index.php/EII
Salman, A., & Nawaz, H. (2018). Islamic financial system and conventional banking: A comparison. Arab Economic and Business Journal, 13(2), 155–167.doi:10.1016/j.aebj.2018.09.003
Setiawan, C., & Oktariza, H. (2013). Syariah and Conventional Stocks Performance of Public Companies Listed on Indonesia Stock Exchange. In Journal of Accounting (Vol. 3, Issue 1).
Setiawan, D. C., & Kodratillah, O. I. (n.d.). Examining Banks Profitability and Banks Efficiency of Islamic Commercial Banks in Indonesia.
Sukmadewi, R., & Tinggi Ilmu Ekonomi Persada Bunda, S. (2020). The Effect of Capital Adequacy Ratio, loan-to-deposit ratio, Operating-Income Ratio, Non-Performing Loans, and Net Interest Margin on Banking Financial Performance. 2(2).
Sukmana, R., & Febriyati, N. A. (2016a). Islamic banks vs conventional banks in Indonesia: An analysis on financial performances. Jurnal Pengurusan, 47, 81–90. https://doi.org/10.17576/pengurusan-2016-47-07
Sukmana, R., & Febriyati, N. A. (2016b). Islamic banks vs conventional banks in Indonesia: An analysis on financial performances. Jurnal Pengurusan, 47, 81–90. https://doi.org/10.17576/pengurusan-2016-47-07
Sunarya, W. (n.d.). The Impact of Internal Performance and Macroeconomic Conditions on Profitability in Indonesian Banking From 2015-2017. https://www.bi.go.id
Sutrisno, B. (2018). Determinan Profitabilitas Bank Umum Konvensional Terdaftar di Bursa Efek Indonesia. Esensi: Jurnal Bisnis Dan Manajemen, 8(1). https://doi.org/10.15408/ess.v8i1.6554
Widyastuti, P. F., & Aini, N. (2021). Pengaruh CAR, NPL, LDR Terhadap Profitabilitas Bank (ROA) Tahun 2017-2019. In Jurnal Ilmiah Mahasiswa Akuntansi) Universitas Pendidikan Ganesha (Vol. 12, Issue 03).
Copyright and permissions
This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.