The Impact of Efficiency, Financing Risk, Liquidity, Independent Commissioner Composition, and Sharia Supervisory Board toward Financial Performance in Sharia Banks

Abstract

Aims: This study aims to examine impact of Efficiency, Financing Risk, Liquidity, Independent Commissioner Composition, and Good Corporate Governance toward Financial Performance in Sharia Bank. The independent variables used in this study are Efficiency (BOPO), Financing Risk (NPF), Liquidity (FDR), Independent Commissioner Composition, and the Sharia Supervisory Board. While the dependent variable of this study is Financial Performance (ROA). Study Design:  Quantitative, Panel data regression on time series data. Place and Duration of Study: Sample: with a purposive sampling approach, a total of 70 consisting of 10 companies listed on the Financial Service Authority in 2017-2023. Methodology: This study utilized the Random Effect Regression Model based on the preliminary test result for panel data regression. Results: The result on this study indicate that BOPO doesn’t affect financial performance, NPF and FDR have a negative effect on financial performance, ICC doesn’t affect financial performance, and GCG doesn’t effect on financial performance. Conclusion: This study concludes that improving on Islamic banks financial performance is influence by several factors, including NPF. The result can be reference for Islamic banks in making financial decision. In addition, this research can also help investors can make decision in Islamic banks.