Proceedings of the 1st International Conference on Economics, Business, Entrepreneurship, and Finance (ICEBEF 2018) 2019
DOI: 10.2991/icebef-18.2019.6
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The Determinants of Bank Profitability: Empirical evidence from Indonesian Sharia Banking Sector

Abstract: This paper aims to examine the internal and external determinants of sharia banks profitability in Indonesia over the period 2010-2017. The bank profitability is measured by return on assets (ROA) as a function of bank-internal and external determinants. Using balances data set and fixed effect model, the empirical results have found strong evidence that both internal and external factors have a strong influence on the profitability. The internal factors of the bank i.e., capital adequacy, credit risk, and ass… Show more

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Cited by 7 publications
(10 citation statements)
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References 36 publications
(57 reference statements)
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“…Therefore, the first hypothesis is supported. Our findings are consistent with the previous studies: e.g., Masrur et al (2019), andSupiyadi et al (2019). Nonperforming financing leads to loss.…”
Section: Financing Risk On Financial Performancesupporting
confidence: 94%
See 2 more Smart Citations
“…Therefore, the first hypothesis is supported. Our findings are consistent with the previous studies: e.g., Masrur et al (2019), andSupiyadi et al (2019). Nonperforming financing leads to loss.…”
Section: Financing Risk On Financial Performancesupporting
confidence: 94%
“…On the contrary, if Islamic bank provide too little financing, Islamic bank cannot meet its function as financing provider. Our result is inconsistent with the finding fromMasrur et al (2019) andSupiyadi et al (2019) who found that liquidity risk is positively associated with the profitability. Islamic Stakeholder Theory states that Islamic bank has a responsibility to meet its liabilities.…”
contrasting
confidence: 99%
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“…This relationship reflects in the framework of the priorities of banks to protect their brand image, their reputation which leads to the valuation of their performance (Supiyadi et al, 2019). By adopting strategies and techniques, banks must offer highly qualified and distinguished services to ensure customer loyalty.…”
Section: Quality Of Servicementioning
confidence: 99%
“…The allocation of costs or costs by increasing the volume of services or gains in terms of profitability results from a specialized workforce. In addition, giving a place for the training of the managers, this leads to increase the professional capacities and to create a good climate for the conduct of the business of the bank (Supiyadi et al, 2019). The institution's profitability therefore increases as a result of policies consistent with the quality of the workforce and a staff competence.…”
Section: The Staff Competencementioning
confidence: 99%