PROFITABILITY DETERMINANTS OF INDONESIAN ISLAMIC BANKS: FINANCING TO DEPOSIT RATIO AND GOVERNANCE
Abstract
This study examines the impact of the FDR on the profitability of Islamic commercial banks in Indonesia, GCG as an intervening variable. The analysis utilizes financial data from 2015 to 2019, collected from annual reports and financial statements of selected banks. The study employs regression and mediation analyses to test the hypotheses. The results indicate that FDR does not significantly affect profitability, measured by ROA. Furthermore, GCG does not mediate the relationship between FDR and ROA. These findings suggest that other factors may play a more critical role in determining the profitability of Islamic banks. The study underscores the importance of adopting conservative financing strategies and enhancing corporate governance frameworks tailored to Sharia compliance. These insights provide valuable recommendations for bank managers and policymakers to improve financial performance and ensure sustainable growth in the Islamic banking sector.
Moraref