The effect of inflation, profit-loss sharing loan, and capital adequacy towards performance of Indonesian Islamic banks

Luksi Visita

doi:10.14710/dijb.2.2.2019.57-63

DOI: https://doi.org/10.14710/dijb.2.2.2019.57-63

The effect of inflation, profit-loss sharing loan, and capital adequacy towards performance of Indonesian Islamic banks

Luksi Visita

Universitas Islam Negeri Walisongo, Indonesia

Citation Format:

Abstract

The purpose of this study is to observe the impact of inflation, profit-loss sharing loan, and capital adequacy towards performance of Islamic banks in Indonesia. This study utilizes longitudinal study from 2010 to 2018 towards Islamic Commercial Banks and Sharia Business Units that are listed in Indonesia. Using pool-time series data, the variables studied are inflation, capital adequacy ratio (CAR), profit-loss sharing loan, and return on assets (ROA). The result shows that only inflation has no significant effect on performance. Capital adequacy affects positively significant, while profit-loss sharing loan affects negatively significant. This study add new perspective on how macroeconomic variable influence Islamic banks’ performance in Indonesia. Additionally, this study is also distinctive because of lengthier observation period (eight years) compared to other studies in recent five years

Fulltext View|Download

Keywords: Inflation; capital adequacy (CAR); profit-loss sharing loan; islamic banks’ performance; ROA

Article Metrics:

Article Info

Section: Articles

Language : EN

In Vol 2, No 2 (2019)

Recent articles

Front matter Back matter The analysis of relationship between experiential marketing, service quality, visitors’ satisfaction, and revisit intention: study on tourism industry The effect of financial performance, IOS, and firm size on cash holdings: the role of dividend policy as moderating variable Determinants of regional entrepreneurship development: empirical study of batik clusters in Indonesia More recent articles

Abdillah, R., Hosen, M. N., & Muhari, S. (2016). The determinants factor of islamic bank's profitability and liquidity in indonesia. Knowledge Horizons. Economics, 8(2), 140
Abusharbeh, M. T. (2014). Credit risks and profitability of Islamic banks: Evidence from Indonesia. World Review of Business Research, 4(3), 136-147
Akhtar, M. F., Ali, K., & Sadaqat, S. (2011). Factors influencing the profitability of Islamic banks of Pakistan. International Research Journal of Finance and Economics, 66(66), 1-8
Almazari, A. A. (2014). Impact of internal factors on bank profitability: Comparative study between Saudi Arabia and Jordan. Journal of Applied finance and banking, 4(1), 125
Amelia, E. (2015). Financial Ratio and Its Influence to Profitability in Islamic Banks. Al-Iqtishad: Jurnal Ilmu Ekonomi Syariah, 7(2), 229-240
Anggreni, M. R., & Suardhika, M. S. (2014). Pengaruh Dana Pihak Ketiga, Kecukupan Modal, Risiko Kredit Dan Suku Bunga Kredit Terhadap Profitabilitas Bank BUMN Tahun 2010-2012. E-Jurnal Akuntansi, 27-37
Bashir, A. H. M. (2003). Determinants of profitability in Islamic banks: Some evidence from the Middle East. Islamic economic studies, 11(1)
Ben Selma Mokni, R., & Rachdi, H. (2014). Assessing the bank profitability in the MENA region: A comparative analysis between conventional and Islamic bank. International Journal of Islamic and Middle Eastern Finance and Management, 7(3), 305-332
Boyd, J. H., & Champ, B. (2006). Inflation, banking, and economic growth. Federal Reserve Bank of Cleveland, 1-4
Demirgüç-Kunt, A., & Detragiache, E. (1998). The determinants of banking crises in developing and developed countries. Staff Papers, 45(1), 81-109
Duraj, B., & Moci, E. (2015). Factors influencing the bank profitability-empirical evidence from Albania. Asian Economic and Financial Review, 5(3), 483
Febianto, I. (2012). Adapting risk management for profit and loss sharing financing of Islamic banks. Modern Economy, 3(01), 73
Ghasemi, A., & Zahediasl, S. (2012). Normality tests for statistical analysis: a guide for non-statisticians. International journal of endocrinology and metabolism, 10(2), 486
Ghozali, I. (2018). Aplikasi Analisis Multivariate dengan Program IBM SPSS 25 (edisikesembilan). Semarang: Universitas Diponogor
Haron, S. (2004). Determinants of Islamic bank profitability. Global Journal of Finance and Economics, 1(1), 11-33
Karim, B. K., Mohamed Sami, B. A., & Hichem, B. K. (2010). Bank-specific, industry-specific and macroeconomic determinants of African Islamic banks' profitability. International Journal of Business and Management Science, 3(1), 39
Khan, T., & Ahmed, H. (2001). Risk management: an analysis of issues in Islamic financial industry. Islamic Development Bank, Islamic Research and Training Institute
Mankiw, N.G. (2006). Principles of macroeconomics. Cengage Learning
Masood, O., & Ashraf, M. (2012). Bank-specific and macroeconomic profitability determinants of Islamic banks: The case of different countries. Qualitative Research in Financial Markets, 4(2/3), 255-268
Purbaningsih, Y. P. (2014). The effect of liquidity risk and non performing financing (NPF) ratio to commercial Sharia bank profitability in Indonesia. International Proceedings of Economics Development and Research, 73(5)
Sahara, Y., & Yanita, A. (2013). Analisis pengaruh inflasi, suku bunga BI, dan produk domestik bruto terhadap return on asset (ROA) bank syariah di Indonesia. Jurnal Ilmu Manajemen (JIM), 1(1)
Saekhu, S. (2015). Pengaruh Inflasi terhadap Kinerja Pembiayaan Bank Syariah, Volume Pasar Uang Antar Bank Syariah, dan Posisi Outstanding Sertifikat Wadiah Bank Indonesia. Economica: Jurnal Ekonomi Islam, 6(1), 103-128
Samad, A. (2015). Determinants bank profitability: Empirical evidence from Bangladesh commercial banks. International journal of financial research, 6(3), 173-179
Sriyana, J. (2015). Islamic banks’ profitability amid the competitive financing in Indonesia. International Journal of Applied Business and Economic Research, 13(4), 1695-1710
Sundararajan, V., & Errico, L. (2002). Islamic financial institutions and products in the global financial system: Key issues in risk management and challenges ahead (Vol. 2). International Monetary Fund
Susana, E., & Prasetyanti, A. (2011). Pelaksanaan dan Sistem Bagi Hasil Pembiayaan Al-Mudharabah pada Bank Syariah. Jurnal keuangan dan Perbankan, 15(3)
Swandayani, D. M., & Kusumaningtias, R. (2012). Pengaruh inflasi, suku bunga, nilai tukar valas dan jumlah uang beredar terhadap profitabilitas pada perbankan syariah di Indonesia periode 2005-2009. AKRUAL: Jurnal Akuntansi, 3(2), 147-166
Tariq, W., Usman, M., Mir, H. Z., Aman, I., & Ali, I. (2014). Determinants of commercial banks profitability: Empirical evidence from Pakistan. International Journal of Accounting and Financial Reporting, 4(2), 1-22
Zarrouk, H., Ben Jedidia, K., & Moualhi, M. (2016). Is Islamic bank profitability driven by same forces as conventional banks?. International Journal of Islamic and Middle Eastern Finance and Management, 9(1), 46-66
Zulifiah, F. (2014). Pengaruh inflasi, bi rate, capital adequacy ratio (car), non performing finance (npf), biaya operasional danpendapatan operasional (bopo) terhadap profitabilitas bank umum syariahperiode 2008-2012. Jurnal Ilmu Manajemen (JIM), 2(3)

Last update:

No citation recorded.

Last update:

No citation recorded.

Author(s) Rights

In order for Diponegoro International Journal of Business (DIJB) to publish and disseminate research articles, we need publishing rights (transferred from author(s) to publisher). This is determined by a publishing agreement between the author(s) and DIJB. This agreement deals with the transfer or license of the copyright of publishing to DIJB, while authors still retain significant rights to use and share their own published articles. DIJB supports the need for authors to share, disseminate and maximize the impact of their research and these rights, in any databases.

As an author, you have rights to a large range of uses of your article, including use by your employing institute or company. These Author rights can be exercised without the need to obtain specific permission. Authors publishing in DIJB has wide rights to use their works for teaching and scholarly purposes without needing to seek permission, including:

use for classroom teaching by Author or Author's institution and presentation at a meeting or conference and distributing copies to attendees;
use for internal training by the author's company;
distribution to colleagues for their research use;
use in a subsequent compilation of the author's works;
inclusion in a thesis or dissertation;
reuse of portions or extracts from the article in other works (with full acknowledgement of final article);
preparation of derivative works (other than commercial purposes) (with full acknowledgement of final article);
voluntary posting on open web sites operated by author or author’s institution for scholarly purposes,

(but it should follow the open-access license of Creative Common CC-by-SA License).

Authors/readers/third parties can copy and redistribute the material in any medium or format, as well as remix, transform, and build upon the material for any purpose, even commercially, but they must give appropriate credit (the name of the creator and attribution parties (authors detail information), a copyright notice, an open-access license notice, a disclaimer notice, and a link to the material) and provide a link to the license.

Authors/readers/third parties can read, print and download, redistribute or republish the article (e.g. display in a repository), translate the article, download for text and data mining purposes, re-use portions or extracts from the article in other works, sell or re-use for commercial purposes, remix, transform, or build upon the material, they must distribute their contributions under the same license as the original Creative Commons Attribution-ShareAlike (CC BY-SA).

Copyright Transfer Agreement for Publishing (Publishing Right)

The authors submitting a manuscript do so on the understanding that if accepted for publication, the copyright for publishing (publishing right) of the article shall be assigned/transferred to the Department of Management, Faculty of Economics and Business, Universitas Diponegoro as the publisher of DIJB.

Upon acceptance of an article, authors will be asked to complete a 'Copyright Transfer Agreement for Publishing (CTAP)'. An e-mail will be sent to the Corresponding Author confirming receipt of the manuscript together with a CTAP form by the online version of this agreement.

DIJB, the publisher, and the editorial board make every effort to ensure that no wrong or misleading data, opinions or statements be published in the journal. In any way, the contents of the articles and advertisements published in DIJB are sole and exclusive responsibility of their respective authors and advertisers.

Remember, even though we ask for a transfer of copyright for publishing (CTAP), our journal Author(s) retain (or are granted back) significant scholarly rights as mentioned before.

The Copyright Transfer Agreement for Publishing (CTAP) Form can be downloaded here