The influence of financial performance on profitability of sharia commercial banks in Indonesia using the CAMEL method

Minarni, Minarni, Abidin, Munirul and Ekowati, Vivin Maharani ORCID: https://orcid.org/0000-0001-6013-0630 (2023) The influence of financial performance on profitability of sharia commercial banks in Indonesia using the CAMEL method. Journal of Islamic Economics Lariba, 9 (2). pp. 329-352. ISSN 2528-3758

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Abstract

This study aims to examine the influence of the financial performance of Islamic banks on their profitability using the CAMEL indicator.
Method
This research is quantitative with a correlational approach. The population in this study consists of 12 Islamic commercial banks in Indonesia, with 5 of them selected as samples. The sampling technique used is purposive sampling. The study utilizes secondary data from quarterly financial ratio reports of Islamic banks published by the Financial Services Authority (OJK). The analysis involves evaluating the impact of CAR, NPF, NOM, BOPO, and FDR on ROA using multiple linear regression analysis.
Results
The findings indicate that, partially, CAR and NPF do not significantly affect the ROA of Islamic banks. However, NOM, BOPO, and FDR have a significant impact on the ROA of Islamic banks.
Implications
the research motivates Islamic bank management to improve their financial ratios to meet the health criteria set by Bank Indonesia (BI) and OJK. Maintaining healthy financial ratios has implications for the level of trust that customers and potential customers have in Islamic banks and ultimately determines the long-term existence of these banks.

Item Type:	Journal Article
Keywords:	CAMELfinancial performanceIslamic commercial bankprofitability
Subjects:	15 COMMERCE, MANAGEMENT, TOURISM AND SERVICES > 1502 Banking, Finance and Investment > 150201 Finance 15 COMMERCE, MANAGEMENT, TOURISM AND SERVICES > 1502 Banking, Finance and Investment > 150299 Banking, Finance and Investment not elsewhere classified
Divisions:	Faculty of Economics > Department of Management
Depositing User:	Vivin Maharani Ekowati
Date Deposited:	05 Mar 2024 09:21

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