Internal determinants of Islamic bank profitability: A cross-country panel data analysis

Ramadhani, Miagasela Aprilia and Wardana, Guntur Kusuma ORCID: https://orcid.org/0000-0001-7901-1228 (2026) Internal determinants of Islamic bank profitability: A cross-country panel data analysis. Maslahah : Jurnal Hukum Islam dan Perbankan Syariah, 17 (1). pp. 51-75. ISSN 2086-5678; E-ISSN 2807-8403

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Abstract

ENGLISH

Islamic banks face increasing pressure to sustain profitability amid postpandemic structural changes. This study examines the effects of operational efficiency (CIR), capital adequacy (CAR), asset quality (NPF), firm size, and liquidity (FDR) on profitability (ROA) during 2022–2025. A quantitative approach was employed using panel data and the Fixed Effect Model (FEM) on 195 quarterly observations from 13 Islamic banks across nine countries. The sample was purposively selected from The Asian Banker’s Top 100 Strongest Islamic Banks in the World based on data availability and regional representation. The findings reveal that all independent variables jointly explain 67.44% of the variation in ROA (F = 78.287; p < 0.001). Partially, CIR (coef. 1.006), CAR (coef. 7.747), and FDR (coef. 0.138) have positive and significant effects on ROA, indicating that operational efficiency, strong capital positions, and adequate liquidity are key drivers of profitability. In contrast, NPF (coef. −5.798) exerts a negative and significant effect, suggesting that deteriorating asset quality reduces bank earnings. Firm size shows no significant influence on profitability (p = 0.121). These findings contribute to the cross-country Islamic banking literature and provide practical implications for regulators and bank managers in strengthening sustainable profitability.

INDONESIA

Bank syariah menghadapi tekanan yang semakin besar untuk mempertahankan profitabilitas di tengah perubahan struktural pascapandemi. Penelitian ini menganalisis pengaruh efisiensi operasional (CIR), kecukupan modal (CAR), kualitas aset (NPF), ukuran perusahaan, dan likuiditas (FDR) terhadap profitabilitas (ROA) bank syariah periode 2022–2025. Penelitian menggunakan pendekatan kuantitatif dengan data panel dan Fixed Effect Model (FEM) pada 195 observasi triwulanan dari 13 bank syariah di sembilan negara. Sampel dipilih secara purposive dari daftar “Top 100 Strongest Islamic Banks in the World” versi The Asian Banker berdasarkan kelengkapan data dan representasi kawasan pasar utama perbankan syariah. Hasil penelitian menunjukkan bahwa seluruh variabel secara simultan menjelaskan 67,44% variasi ROA (F = 78,287; p = 0,000). Secara parsial, CIR (koef. 1,006), CAR (koef. 7,747), dan FDR (koef. 0,138) berpengaruh positif dan signifikan terhadap ROA, menunjukkan bahwa efisiensi operasional, kekuatan modal, dan likuiditas yang memadai menjadi pendorong utama profitabilitas. Sebaliknya, NPF (koef. −5,798) berpengaruh negatif dan signifikan, menegaskan bahwa penurunan kualitas aset dapat menekan laba. Ukuran perusahaan tidak berpengaruh signifikan (p = 0,121), sehingga skala perusahaan tidak otomatis meningkatkan kinerja. Temuan ini memperkaya literatur perbankan syariah lintas negara dan memberikan implikasi praktis bagi regulator serta manajemen dalam memperkuat profitabilitas berkelanjutan.

Item Type:	Journal Article
Keywords:	operational efficiency; capitalization; asset quality; company size; liquidity; profitability
Subjects:	15 COMMERCE, MANAGEMENT, TOURISM AND SERVICES > 1502 Banking, Finance and Investment
Divisions:	Faculty of Economics > Department of Islamic Banking
Depositing User:	Guntur Kusuma Wardana
Date Deposited:	10 Jul 2026 15:45

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