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Sharia Commercial Banks, the provision of
minimum capital is determined as follows:
a. 8% (eight percent) of Risk Weighted Assets for
banks with a risk profile rating of 1 (one);
b. 9% (nine percent) up to less than 10% (ten
percent) of RWA for banks with a risk profile
rating of 2 (two);
c. 10% (ten percent) up to less than 11 (eleven
percent) of RWA for banks with a risk profile
rating of 3 (three); or
d. 11% (eleven percent) to 14% (fourteen percent)
of RWA for banks with a risk profile rating of 4
(four) or 5 (five).
The greater the CAR ratio, the bank has the
potential to increase profits. In other words, CAR
affects ROA. This has been proven by Kishori
(2017), Anggreni, (2014), Shamki, Alulis and
Sayari, (2016), Margaretha (2017), Chou and
Buchdadi, (2016), Sukirmo (2016), Sudiyanto
(2010), Nahar and Prawoto, (2017), Kinanti, (2017),
Amelia, (2015), Andhina Dyah Sulityowati, Noer
Azam Achsani, (2017), Hantono, (2017), M, Ali and
Habbe, (2012) and Bachri (2013). Meanwhile, some
research showed different results and indicates that
CAR does not have a significant effect on ROA
(Sudiyatno, 2013, and Wibowo and Syaichu, 2013).
2.2 Liquidity
Banks are very concerned about fulfilling their
liquidity because the most important measure of
public trust is about whether the bank can fulfill the
withdrawal of funds made by the customers for their
interests anytime. It is in addition to fulfill the
conditions set by the monetary authorities and
correspondent banks where banks maintain non-
bank accounts (Ericson Leon Boy Sonny, 2007).
In the banking industry, the liquidity ratio is
known as the Loan to Deposit Ratio. In Islamic
banking, the term of loan is known as financing
(Antonio, 2001). This ratio is known as Financing to
Deposit Ratio (FDR). FDR is a ratio to measure the
composition of the amount of financing provided
compared to the amount of public funds and the
capital used (Kasmir, 2012). The higher this ratio
shows the lower the ability of bank liquidity because
the amount of funds needed for financing is getting
bigger (Dendawijaya, 2009).
Based on Financial Services Authority
Regulation Number 3 / POJK.03 / 2016 concerning
Islamic People's Financing Bank is setting the
Financing to Deposit Ratio ranges from 78% -100%.
If the FDR is under the standard set by Indonesia
Financial Services Authority, it shows the lack of
effectiveness of the bank in channeling its financing,
so that there is a loss of opportunity for profit. If the
FDR is more than 100%, the financing channeled
exceeds the funds collected so that the bank will
experience a shortage of funds to fulfill its
obligations. This high and low ratio indicates the
level of liquidity of the bank, the higher the FDR
number of a bank, described as a bank that is less
liquid compared to banks that have a smaller ratio.
FDR is calculated from the amount of financing
divided by third party funds (Muhammad, 2005).
Several studies have examined the effect of liquidity
(FDR) on profitability (ROA) with a significant
effect that was carried out by Zakaria (2015),
Farooq, Qasim and Asad, (2015), Malik et al.,
(2014), Chou and Buchdadi, (2016), Hantono,
(2017) dan Sukirmo (2006), Kishori (2017),
Andhina Dyah Sulityowati, Noer Azam Achsani,
(2017) dan M, Ali and Habbe, (2012). Meanwhile,
research from Pramuka, (2010) showed that FDR
has no significant effect on ROA.
2.3 Credit Risk
Credit risk is also called financing risk. Financing
risk is the risk due to the failure of the debtor and /
or other parties in fulfilling the obligation to pay off
financing at the bank. In financing activities, both
commercial financing and consumption financing,
there is a possibility that the debtor cannot fulfill the
obligation to the bank for various reasons such as
business failure, because the character of the debtor
who does not have good faith to fulfill obligations to
the bank, or indeed there is an error from the bank
itself in the financing approval process (Indonesian
Bankers Association, 2015).
Sharia Commercial Banks need to improve
management of their financing risks so that the level
of Non Performing Financing does not exceed the
provisions of Indonesia Financial Services
Authority. Financial Services Authority Regulation
Number 3 / POJK.03 / 2016 concerning Islamic
People's Financing Bank have set that the ratio of
Non-Performing Financing is a maximum of 7% of
total financing.
According to Bank Indonesia regulations in
2012, Non Performing Financing is calculated by
adding all of KL, D, M Financing divided by total
financing. The higher the NPF level of a bank, the
lower the income that must be obtained. Vice versa,
if the NPF level is low, the level of bank income will
increase. Thus, increasing NPF is considered to have
a significant effect on bank performance. Previous
research that proved the significant effect of NPF
towards ROA was found by Yoppy and
Purbaningsih, (2014), Zakaria (2015), Anggreni,
(2014), Amelia, (2015), Pramuka, (2010), Hantono,
(2017), Wibowo (2013) and Bachri (2013), Nahar
and Prawoto, (2017), Kinanti, (2017) and Sudiyanto
(2010). Whereas, previous research from M. Ali and
Habbe, (2012) found that NPF has no significant
effect on ROA.
UNICEES 2018 - Unimed International Conference on Economics Education and Social Science
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