Financing Management: An Alternative for Increasing The Profitability of Islamic Bank

Setyawati, Irma and Mardiyah, Siti (2021) Financing Management: An Alternative for Increasing The Profitability of Islamic Bank. In: ICSTIAMI 2019, 17-18 July 2019, Jakarta, Indonesia.

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Abstract

The purpose of this study was to analyze the financing management carried out by Islamic banks to increase the profitability of Islamic banks in Indonesia. Data were taken from the monthly financial statements of Islamic banks of 2009-2014 period and was analyzed with simultaneous equation regression. The results of this study suggested that in model 1, equity financing positively and significantly affects the non-performing finance, Debt financing positively and not significantly affects the non-performing finance. While in model 2, non-performing finance negatively and significantly affects the profit expense ratio. Non-finance income positively and not significantly affects the profit expense ratio. Thus, the company’s performance reflected in the profit expense ratio, which is used to assess cost efficiency performed by Islamic banks for profit achievement is largely determined by the financing management of the bank. Cost efficiency will be achieved if Islamic bank can overcome bad financing, both in the form of debt financing and equity financing.

Item Type: Conference or Workshop Item (Paper)
Uncontrolled Keywords: debt financing equity financing non-finance income non-performing finance profit expense ratio simultaneous equation
Subjects: H Social Sciences > H Social Sciences (General)
Depositing User: EAI Editor IV
Date Deposited: 16 Dec 2021 10:44
Last Modified: 16 Dec 2021 10:44
URI: https://eprints.eudl.eu/id/eprint/9072

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