THE INFLUENCE OF FIRM SIZE, CAPITAL ADEQUACY, AND PROFITABILITY ON LIQUIDITY RISK MANAGEMENT OF INDONESIA ISLAMIC BANKING

One of the problems facing sharia banking is liquidity risk management. Liquidity risk management in Islamic banking faces greater challenges because they need to be in accordance with Sharia. This research aims to determine the influence of firm size, capital adequacy, and profitability with return on asset and return on equity as proxies, on Indonesian Islamic banking liquidity risk management which is listed in Bank Indonesia in the period 2010-2014. This research uses panel data from eleven Islamic banks. The dependent variable in this research is liquidity risk and the independent variables are firm size, capital adequacy, and profitability with return on asset and return on equity as proxies. The method of analysis in this research uses descriptive statistics, regression model selection, classic assumption test, and hypothesis test. The results show that firm size, capital adequacy, and profitability with return on asset and return on equity as proxies simultaneously affect liquidity risk management, where partially return on equity does not affect liquidity risk management. Keywords: Capital Adequacy, Firm Size, Islamic Banking, Liquidity Risk Management, Profitability

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PENGARUH KINERJA KEUANGAN TERHADAP PEMBIAYAAN BANK UMUM SYARIAH DI INDONESIA (PERIODE 2009-2013)

Journal of Islamic Economics and Finance ◽

10.22373/share.v5i2.1239 ◽

2016 ◽

Vol 5 (2) ◽

Author(s):

Irma Safitri ◽

Nadirsyah Nadirsyah ◽

Darwanis Darwanis

Keyword(s):

Commercial Banks ◽

Research Data ◽

Capital Adequacy ◽

Third Party ◽

Islamic Banking ◽

Islamic Banks ◽

Independent Variables ◽

The Third ◽

Capital Adequacy Ratio ◽

Observation Period

The purposes of this research were to determine the effect of the financial performance of Islamic commercial banks in Indonesia on financing, both individually and simultaneously. The performance was measured through Third Party Funds (TPF), Capital Adequacy Ratio (CAR), Non-Performing Financing (NPF), and Financing to Deposit Ratio (FDR). These four independent variables to be tested influence on the dependent variable. This research used census method that includes all of the Islamic banks in Indonesia for observational data. Research data observation period from 2009 until 2013 a total of 11 banks. Multiple linear regression was used to analyze the data.The results of this study found that the Third Party Funds (TPF), Capital Adequacy Ratio (CAR), Non Performing Financing (NPF), and Financing to Deposit Ratio (FDR) affect the financing, both individually and simultaneously. Fluctuations in either an increase or decrease of financing that occurred in Islamic banking in Indonesia is determined by the four independent variables. That is to say, the four independent variables that have an important role in the financing of Islamic banking in Indonesia. =========================================== Penelitian ini bertujuan untuk menguji pengaruh kinerja keuangan bank umum syariah di Indonesia terhadap pembiayaan, baik secara parsial maupun simultan. Kinerja keuangan diukur melalui Dana Pihak Ketiga (DPK), Capital Adequacy Ratio (CAR), Non Performing Financing (NPF), dan Financing to Deposit Ratio (FDR) Keempat variabel bebas tersebut akan diuji pengaruhnya terhadap satu variabel tidak bebas. Penelitian ini adalah penelitian sensus, yakni memasukan semua bank umum syariah yang ada di Indonesia ke dalam data pengamatan. Periode pengamatan data penelitian dari tahun 2009 s.d 2013 yang berjumlah 11 perbankan. Metode analisis yang digunakan adalah regresi linear berganda. Hasil penelitian ini menemukan bahwa Dana Pihak Ketiga (DPK), Capital Adequacy Ratio (CAR), Non Performing Financing (NPF), dan Financing to Deposit Ratio (FDR) berpengaruh terhadap pembiayaan pada perbankan syariah di Indonesia, baik secara parsial maupun simultan. Fluktuasi baik itu peningkatan atau penurunan pembiayaan yang terjadi pada perbankan syariah di Indonesia ditentukan oleh keempat variabel bebas tersebut. Sehingga dapat dikatakan bahwa, keempat variabel bebas tersebut mempunyai peranan penting atas pembiayaan pada perbankan syariah di Indonesia.

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Analysis of the determinants of bank liquidity risk: The case of Islamic banks in the UAE

SHS Web of Conferences ◽

10.1051/shsconf/202111901008 ◽

2021 ◽

Vol 119 ◽

pp. 01008

Author(s):

Khadija Ichrak Addou ◽

Afaf Bensghir

Keyword(s):

Liquidity Risk ◽

Multiple Linear Regression Model ◽

Capital Adequacy ◽

Annual Data ◽

Islamic Banks ◽

Mena Region ◽

Return On Assets ◽

Return On Equity ◽

Risk Determinants ◽

The Impact

This article aims to examine the principal parameters that impact the liquidity risk incurred by Islamic banks in the UAE. The study examines annual data from four Islamic banks in the UAE. The Data is extracted from their annual activity reports and financial results. A multiple linear regression model is used to assess the impact of six bank-specific variables (Return on Equity, return on assets, size of the bank, liquidity gaps, non-performing loans and capital adequacy ratio) on the liquidity risk of UAE Islamic banks. The designed model shows that ROA and NPL negatively impact the liquidity risk of the studied banks, while the other determinants, namely size, ROE, liquidity gaps and CAR contribute to the improvement of liquidity of UAE banks. Thus, our empirical results complement the existing studies related to the analysis of liquidity risk determinants incurred by Islamic banks operating in the MENA region, especially Emirati banks.

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Liquidity Risk Management: A Comparative Study between Conventional and Islamic Banks in Bangladesh

Journal of Business and Technology (Dhaka) ◽

10.3329/jbt.v10i2.29465 ◽

2016 ◽

Vol 10 (2) ◽

pp. 18-35 ◽

Cited By ~ 3

Author(s):

Md Lutfor Rahman ◽

SM Hasanul Banna

Keyword(s):

Risk Management ◽

Liquidity Risk ◽

Equity Capital ◽

Capital Adequacy ◽

Annual Reports ◽

Islamic Banks ◽

Working Capital ◽

Return On Assets ◽

Conventional Banks ◽

Conventional And Islamic Banks

Liquidity risk may arise from diverse operations of financial intermediaries, facilitators and supporters as they are fully liable to make available liquidity when required by the third party. Incase of Islamic Banks additional efforts are required for scaling liquidity management due to their unique characteristics and conformity with Shariah principles. The objective of this study is to look into the liquidity risk associated with the solvency of the financial institutions, with a purpose to evaluate liquidity risk management (LRM) through a comparative analysis between conventional and Islamic banks of Bangladesh. This paper investigates the significance of Size of the Firm, Net Working Capital, Return on Equity, Capital Adequacy and Return on Assets (ROA), on Liquidity Risk Management in conventional and Islamic banks in Bangladesh. The study has taken six mid-size banks- three conventional and three Islamic banks as samples. It is based on secondary data which are collected from the selected banks annual reports, covering a period of 2007-2011. Independent variables that have positive but insignificant relation are; size of the bank and net working capital to liquidity risk in Islamic banks and in case of conventional banks size of bank is negatively related with the liquidity risk. Only return on assets is positively affecting the liquidity risk at 10% level in case of conventional banks, but in Islamic banks the relationship is insignificant. The other variables are found to be insignificant in affecting the liquidity risk for both the conventional and Islamic banks in BangladeshJournal of Business and Technology (Dhaka) Vol.10(2) 2015; 18-35

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ANALISIS POTENSI TERJADINYA FINANCIAL DISTRESS PADA BANK UMUM SYARIAH (BUS) DI INDONESIA

JURNAL EKONOMI DAN PERBANKAN SYARIAH ◽

10.46899/jeps.v3i1.151 ◽

2020 ◽

Vol 3 (1) ◽

pp. 1-20

Author(s):

Melan Rahmaniah ◽

Hendro Wibowo

Keyword(s):

Financial Distress ◽

Annual Report ◽

Liquidity Risk ◽

Secondary Data ◽

Risk Profile ◽

Islamic Banking ◽

Islamic Banks ◽

Return On Equity ◽

Descriptive Approach ◽

Method Factors

ABSTRAK: Tujuan penelitian ini adalah untuk mengukur tingkat kesehatan bank dengan menggunakan metode RGEC. Faktor-faktor yang dinilai adalah Risk profile, GCG, earnings, dan capital. Data dalam penelitian ini adalah data sekunder yang diambil dari laporan tahunan tiga Bank Umum Syariah (BUS) pada tahun 2011 sampai 2013. Penelitian ini menggunakan pendekatan deskriptif kuantitatif. Hasil penelitian ini menunjukkan bahwa pada tahun 2011 hingga 2013 dari ketiga BUS tidak ada yang dinyatakan tidak sehat dan tidak berpotensi terjadinya high financial distress. Hasil Penelitian ini juga menunjukkan bahwa ketiga BUS tersebut mengalami penurunan dalam kinerja earning yang diukur dari rasio ROA dan ROE dan risiko likuiditas yaitu rasio FDR, akan tetapi penurunan kinerja tersebut tidak berpengaruh signifikan dan tidak menyebabkan masing-masing BUS mengalami potensi high financial distress.Kata kunci: Tingkat Kesehatan, Bank Umum Syariah, Metode RGEC, dan Financial Distress.ABSTRACT: This study aims to measure the soundness of Islamic banking using RGEC method. As RGEC method, factors used in this study are risk profile, good corporate government (GCG), earnings, and capital. The data used is secondary data which taken from annual report of three of Islamic bank from 2011 to 2013. This research used quantitative and descriptive approach to analyse the data. The result showed that the three Islamic banks are in a secure level of the soundness and has no potential of high financial distress. Moreover the result showed us that the three bank have decreased on earning performance which is measured by performance of ROA (Return on Asset) and ROE (Return on Equity) and liquidity risk is the ratio of FDR (Financing to Deposit Ratio), however the influence of it is not significant and each bank has not lead to high financial distress.Keywords: Level of Soundness, Islamic Banks, RGEC Method, and Financial Distress.

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Factors Influencing the Margins of Islamic Banks

Global Business Review ◽

10.1177/0972150918772970 ◽

2018 ◽

Vol 19 (4) ◽

pp. 1026-1036

Author(s):

Nurhafiza Abdul Kader Malim ◽

M.K. Normalini

Keyword(s):

Global Financial Crisis ◽

Positive Impact ◽

Liquidity Risk ◽

Institutional Development ◽

Capital Adequacy ◽

Islamic Banking ◽

Islamic Banks ◽

Factors Influencing ◽

Conventional Banks ◽

The Global Financial Crisis

This article investigates the factors influencing the margins of Islamic banks in 15 countries for the period 2007–2013. The article also analyses the effect of the global financial crisis (2007–2009) on the Islamic banks’ margins. Despite the rapid growth of Islamic banking, the margins of Islamic banks remain higher than conventional banks. The margins reflect the costs of financial intermediation, as higher margins may discourage clients from using bank services. The findings reveal that the margins of Islamic banks are affected mainly by capital adequacy, overhead costs, liquidity risk, bank size and institutional development. Interestingly, the crisis has a positive impact on Islamic banks’ margins. These findings will be useful for the design of policies in narrowing the margins.

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PENGARUH KEBIJAKAN PEMBIAYAAN DALAM MENINGKATKAN KINERJA KEUANGAN PERBANKAN SYARIAH: STUDI EMPIRIS PADA PERBANKAN SYARIAH DI INDONESIA

Journal of Management and Business Review ◽

10.34149/jmbr.v12i1.47 ◽

2017 ◽

Vol 12 (1) ◽

Author(s):

Sutrisno Sutrisno

Keyword(s):

Financial Performance ◽

Firm Size ◽

Control Variable ◽

Third Party ◽

Islamic Banking ◽

Islamic Banks ◽

Significance Level ◽

Return On Equity ◽

Financing Decisions ◽

Net Profit

The development of Islamic banking in Indonesia is characterized by rapidly increasing assets, third party funds, and financing. Islamic banks as financial intermediaries are required to be able to distribute the funds in the form of financing to communities who need of funds. Due to the funding provided is supposed to increase bank profits. The purpose of this study is to analyze and examine the role of financing decisions to financial performance on Islamic banking. In this study the financial performance measured by return on equity (ROE) and Net Profit Margin (NPM) as the dependent variable, while the independent variables are cinsist of mudharaba financing (MUD), Musharaka financing (MUS), murabaha financing (MUR), Ijara financing (IJR), and qordul hasan financing (QORD). We also use firm size as a control variable. Samples in this study were eight islamic banks in Indonesia. We use multiple regression analyzes with the aid program as E-views, with a significance level of 5%. The results showed that variable of musharaka financing, murabaha financing, and firm size have a significant effect on profitability. While variable of mudaraba financing, ijara financing and qord financing no significant effect on islamic bank performance.

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Capital Adequacy Ratio And Its Influencing Factors On The Islamic Banking In Indonesia

IKONOMIKA ◽

10.24042/febi.v2i2.1881 ◽

2017 ◽

Vol 2 (2) ◽

pp. 162

Author(s):

Yolanda Yolanda

Keyword(s):

Panel Data ◽

Linear Regression ◽

Multiple Linear Regression Model ◽

Capital Adequacy ◽

Financial Data ◽

Islamic Banking ◽

Islamic Banks ◽

Independent Variables ◽

Capital Adequacy Ratio ◽

Insight Into

Bank is one of the most decisive financial intermediary of a country's economy. Country that in the economies has healthy banking industries will have an impact on all the activity and stability of the economy. The purpose of this study is to investigate the determinants of the capital adequacy of Islamic banks in Indonesia by using panel data of eleven Islamic Banks from 2012 to 2016. This study uses secondary financial data that were analyzed using multiple linear regression model to the capital adequacy of banks (Capital Adequacy Ratio / CAR) as the dependent variable, and profitability (ROA, ROE, NIM) and Liquidity (FDR) as the independent variables. The findings of this study showedpositive correlation between the financial performance of capital adequacy and liquidity. As a result, this study provides more insight into the determinants that affect the capital adequacy of Islamic Banks in Indonesia.

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PENGARUH MANAJEMEN RISIKO LIKUIDITAS TERHADAP KINERJA PERBANKAN DI BURSA EFEK INDONESIA

National Conference of Creative Industry ◽

10.30813/ncci.v0i0.1315 ◽

2018 ◽

Author(s):

Herry Cornelius Hutabarat

Keyword(s):

Risk Management ◽

Key Words ◽

Liquidity Risk ◽

Operating Costs ◽

Return On Assets ◽

Return On Equity ◽

Reserve Requirements ◽

Operating Income ◽

Independent Variables ◽

Dependent Variables

<pre>The study aims to examine the effect of liquidity risk management on Return on Assets / ROA and on Return on Equity / ROE. Risk management is proxies by operating costs on operating income (BOPO), non-performing loans (NPL), and Reserve Requirements (RR). The results showed that the independent variables BOPO and RR had a significant effect on the dependent variable Y1, and simultaneously independent variables had a significant effect on the dependent variables Y1 and Y2.</pre> Key words : BOPO, NPL, RR, ROA and ROE

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Revisiting the Role of Bank’s Capital, Loan Loss Provisioning and Risky Assets to Credit Risk in Malaysia: An Application of Dynamic Heterogenous Panel Technique

The Journal of Social Sciences Research ◽

10.32861/jssr.spi6.466.471 ◽

2018 ◽

pp. 466-471

Keyword(s):

Risk Management ◽

Credit Risk ◽

Balance Sheet ◽

Capital Adequacy ◽

Market Force ◽

Islamic Banking ◽

Islamic Banks ◽

Credit Risk Management ◽

Loan Loss ◽

Risky Assets

The issue of credit risk among financial institutions has become de rigueur matter for many years particularly among risk managers, market players, regulators and academia in Malaysia. The negligence over specific credit risk factors in credit risk management could herald to the balance sheet loss as what happened in the US mortgage prime crisis. This paper is presented primarily to investigate the long run and short run relationship between credit risk and bank specific factors such as capital adequacy(CAR), loan loss provisioning(PROV) and risky assets (RWA) across different types of banks comprising Islamic banks, Islamic banking windows, commercial banks and investment banks in Malaysia. The application of heterogeneous panel model namely Pooled mean group (PMG) will allow for heterogeneity effect across non-homogenous banking operations. From our findings, it is evident that an increase in capital level reduces default problem for Islamic banking windows. Further, we find positive association between RWA and NPL and also between PROV and NPL which implies that loan loss provisioning could be important signal of risk taking behaviour. Besides that, our results also suggest that the nature of credit risk among Islamic banks in Malaysia are still following market force given by the fact that their credit risk management routines still follow the conventional practices.

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PENGARUH MANAJEMEN RISIKO KREDIT TERHADAP KINERJA PERBANKAN DI BURSA EFEK INDONESIA

Jurnal Akuntansi Bisnis ◽

10.30813/jab.v10i2.995 ◽

2018 ◽

Vol 10 (2) ◽

Author(s):

Herry Hutabarat ◽

Sarton Sinambela

Keyword(s):

Risk Management ◽

Credit Risk ◽

Capital Adequacy ◽

Operational Cost ◽

Credit Risk Management ◽

Income Loss ◽

Return On Equity ◽

Operating Income ◽

Independent Variables ◽

Dependent Variables

This study aim is to test the effect of credit risk management (independent variable) on Return on Asset (ROA) and on Return on Equity (ROE) (dependent variables). Credit risk management is projected with capital adequacy ratio (CAR), non performing loan (NPL), operational cost to operating income, loss reserves, and interest margin (IM). The results showed that from five independent variables and two dependent variables, only 3 independent variables had significant effect on ROA or ROE, which are; Non-performing loan, operational cost to operating income and interest rate. Capital adequacy variable only has significant effect on ROE. The reserve loss variable only has a significant effect on ROA.

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