Safeguarding Stability and Enhancing Profitability: The Case of Islamic Banking in Indonesia
Faizul Mubarok,
Martino Wibowo,
Sahraman D Hadji Latif
Abstract:This study examines the impact of crises, non-performing financing variables, exchange rates, inflation, and interest rates on Islamic banks' short-term and long-term profitability in Indonesia. Profitability (ROA) fluctuations are also assessed in consideration of exogenous shocks. This analysis uses the Vector Error Correction Model (VECM) to examine monthly data from 2007 to 2023. The results suggest that non-performing financing (NPF), exchange rates (BIRT), and inflation (IFLS) have a substantial impact o… Show more
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