Determinant: Efficiency and Financial Performance Of Islamic Commercial Banking in Indonesia

Abstract

The purpose of this study was to determine the effect of internal factors on efficiency with BOPO and their impact on the financial performance of Islamic commercial banks. The variables tested in this study are Total Assets, Capital Adequacy Ratio, Financing to Deposit Ratio, Non-Performing Financing, Operational Costs, Net Profit Margin, Efficiency as proxied by BOPO, financial performance is proxied by Return on Assets. The type of research used is explanatory research. The research sample is Sharia Commercial Banks that are listed in the OJK for the period 2014-2018. The analysis technique used is PLS SEM with the analysis tool WarPLS 6.0. The findings of this study indicate that Total Assets, Non Performing Finance, Operational Costs, Net Profit Margin have a positive effect on BOPO, Net Profit Margin has a positive effect on Return On Assets, BOPO has a negative effect on Return On Assets.