This study aims to examine the impact of risk and reputation on financial performance. More specifically, we use financing risk, liquidity risk, reputation with rewards, and growth in profit-sharing based financing as our variable of interests. We also assign bank size as a control variable. Our data is analyzed using Generalized Least Square (GLS) regression. Islamic Commercial Banks listed in Sharia Banking Statistics (Statistik Perbankan Syariah - SPS) published by OJK in 2015−2019 are selected as our sample. We find that (1) financing risk has a negative effect on financial performance; and (2) both reputation with rewards and bank size have a positive effect on financial performance. However, liquidity risk and growth in profit-sharing based financing do not affect financial performance. Several research implications are the importance of risk mitigation, the importance to maintain the reputation of the Islamic bank’s stakeholders, and creating innovative funding and financing products.
scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.