Profitability and Stability of Islamic Banking in Indonesia Periode 2010-2017
Dedi Supiyadi

STIE INDONESIA MEMBANGUN (STIE INABA)

Abstract

Indonesia is the largest Muslim population in the world, but literacy of Islamic finance and banking is still limited which has an impact on the development of sharia banking in Indonesia, including literature on Profitability and Stability in Islamic Banking. The aim of this study was to determine the profitability and stability of 34 Islamic banks in Indonesia for the period 2010-2017. This study analyzes the factors that affect profitability and stability of Islamic banking using panel data regression with fixed effect techniques. The results showed that the profitability of Islamic banks is determined by capital, credit risk, operational efficiency, liquidity risk, asset size, stability, GDP and inflation. The results showed that the profitability of Islamic banks is determined by capital, credit risk, operational efficiency, liquidity risk, asset size, stability, GDP and inflation. The results of Islamic banking stability found that profitability, credit risk has impact on bank stability, while the Asset Size, liquidity, Operating Effectiveness, inflation and GDP do not affect the Islamic banks stability. This findings are very important for the growth and development of Islamic banks in Indonesia.

Keywords: Capital, Credit Risk, Islamic Banking, Inflation, liquidity, Profitability, GDP, Stability

Topic: Financial Management and Accounting