DO LIQUIDITY AND CAPITAL ADEQUACY RATIO MATTER FOR ISLAMIC BANKS PERFORMANCE IN INDONESIA? AN ANALYSIS USING FINANCING RISK AS MEDIATOR

Julia Safitri, Arinal Rahmati, Jayadi Jayadi, Muhamad Arief Affandi

Abstract


This study is driven by the inconsistent findings of previous research on assessing the determinants of banks' performance. In addition, financing risk has been indicated as a significant variable in mediating the related research but failed to incorporate in previous research. Therefore, this study aims to assess the role of liquidity and Capital Adequacy Ratio (CAR) on Islamic bank's performance in Indonesia using financing risk as a mediator. Data were collected from 14 samples operating in Indonesia in the period 2013-2019. They were then analyzed using Partial Least Squares – Structural Equation Modelling (PLS-SEM) with Warp PLS 7.0 as a tool of analysis. The results show that variable liquidity (FDR) significantly influences Bank Performance mediated by Financing Risk (NPF). Meanwhile, variable CAR shows no significant influence on Bank Performance even when it was mediated by the Financing Risk variable (NPF). This finding implies that providing short-term financing is more profitable for an Islamic bank than a longer one. This finding is in line with the Commercial Loan Theory, which states that it is better to provide loans in the short term to minimize the possibility of defaults that will impact the bank's performance.

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ABSTRAK – Apakah Likuiditas dan Rasio Kecukupan Modal mempengaruhi Kinerja Bank Syariah di Indonesia? Suatu Analisis menggunakan Risiko Pembiayaan sebagai Mediator. Penelitian ini didorong oleh tidak konsistennya temuan penelitian sebelumnya dalam menilai determinan kinerja bank. Selain itu, risiko pembiayaan telah terindikasi sebagai variabel yang signifikan dalam memediasi pengaruh beberapa variabel penilaian kinerja bank syariah, tetapi tidak diakomodir dalam penelitian-penelitian sebelumnya. Oleh karena itu, penelitian ini bertujuan untuk menilai peran variabel likuiditas dan CAR terhadap kinerja bank syariah di Indonesia dengan menggunakan risiko pembiayaan sebagai mediator. Data penelitian dikumpulkan dari 14 bank syariah yang beroperasi di Indonesia. Analisis data dilakukan dengan menggunakan PLS-SEM dengan WarpPLS 7.0. Hasil penelitian menunjukkan bahwa likuiditas berpengaruh terhadap kinerja bank bank syariah dengan dimediasi oleh risiko pembiayaan (NPF). Sedangkan variabel CAR tidak menunjukkan pengaruh yang signifikan terhadap kinerja bank syariah walaupun dimediasi oleh NPF. Penelitian mempunyai implikasi bahwa memberikan pembiayaan jangka pendek lebih menguntung bagi bank syariah dari pada pembiayaan jangka panjang. Hal ini sejalan dengan Commercial Loan Theory yang menyebutkan bahwa memberikan pinjaman dalam jangka pendek lebih menguntungkan karena dapat meminimalisir terjadinya wanprestasi yang berdampak pada peningkatan kinerja bank.


Keywords


Islamic Banking, Commercial Loan Theory, Liquidity, Noan Performing Financing.

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DOI: http://dx.doi.org/10.22373/share.v10i1.8104

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