Title:
DETERMINANTS OF BANK PERFORMANCE: EMPIRICAL STUDY ON SHARIA BANK IN INDONESIA

Authors:
Sigit Handoyo, Irfan Gaffar Adnan, Indonesia

Abstract:

The development of Islamic banking has grown rapidly. This is indicated by a fairly high growth rate. Sharia banking, which was originally an alternative bank, has now become a competitive choice for customers in Indonesia. This is evidenced by the closure of the practice of conventional banks in a region in Indonesia because they prefer Sharia banks. Research on the performance of Islamic banks in Indonesia is insufficient when compared to research on conventional banks. This study reveals how the performance of Islamic banks in Indonesia with ROA as a parameter by referring to previous studies of conventional banks. Variables such as TPF, OER, NPF and FDR were selected in this study to measure their influence on the performance of Islamic banks in Indonesia. The analysis uses panel data regression to estimate the performance of the empirical model. The samples used are all Islamic banks listed on the Indonesia Stock Exchange. The results of this study indicate that the TPF, OER, NPF and FDR have a significant and significant effect on ROA. The implication of the results of this research is that although recently the growth of Islamic banking in Indonesia is quite fast, Islamic banks must continue to prove that Islamic banks can compete in the banking sector in capturing the trust of potential customers in Indonesia.