The EFFECT OF FINANCIAL PERFORMANCE, EXTERNAL FACTORS, AND OPERATIONAL RATIO ON CAR RATIO OF SHARIA COMMERCIAL BANKS IN INDONESIA

Case Study : COMMERCIAL SHARIA BANKS IN INDONESIA

Keywords: GDP, INFLATION, ISLAMIC BANK, SHARIA BANK, BOPO, ROE

Abstract

Capital becomes an important part of a bank, even to determine the bank is healthy or not is assessed from its capital ratio. Likewise, sharia banks in Indonesia are growing rapidly in this modern era. The maximum use of capital in profit-sharing financing is believed to be more a leverage than investments such as sukuk and others. The growth of sharia banking in Indonesia is considered slow when compared to growth in foreign countries, while Indonesia as the largest Muslim population in the world has greater potential than other countries. The monetary climate and the lack of capital that enter sharia banks are believed to be the cause of the slow growth of sharia banking in Indonesia. In this study I found that ROE of 0.1% and Inflation of 0.466% had a positive effect on the CAR ratio, while GDP was 0.431% and BOPO was 0.116% with negative effect on the CAR ratio.

Author Biography

Mochammad Fahlevi, Kusuma Negara Business School

Experienced Research Executive in Finance and writing several books and journals. Having experienced as well became lecturer at School of Business Kusuma Negara, with materials such as Finance, Islamic Banking, Business, Feasibility Studies, and Research Methodology. Education & Experience Graduated with Master of Management degree in Management, School of Business Kusuma Negara, Jakarta Graduated with Master of Philosophy degree in Philosophy studies, Islamic College, London PhD Candidate in Management, University of Brawijaya, Malang

References

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Published
2019-04-08
How to Cite
Fahlevi, M., Irma, D., Maemunah, S., & Mahfud, I. (2019). The EFFECT OF FINANCIAL PERFORMANCE, EXTERNAL FACTORS, AND OPERATIONAL RATIO ON CAR RATIO OF SHARIA COMMERCIAL BANKS IN INDONESIA. Journal of Research in Business, Economics and Management, 12(2), 2348-2355. Retrieved from http://scitecresearch.com/journals/index.php/jrbem/article/view/1705
Section
Articles