The Determinants of Islamic Commercial Bank Profitability in Indonesia during 2012-2018

Banking profitability indicates bank performance and bank health. Based on data from ojk.go.id, the average level of profitability of Islamic banking in Indonesia is below the conventional banks. In this study, profitability is measured by ROA (Return to Asset). This study aims to analyzes the effects of Capital Adequacy Ratio (CAR), Financing to Deposit Ratio (FDR), Non Performing Financing (NPF), Operational Risk Based on Comparison between Operational Expense and Operational Revenue (BOPO), Third Party Funds (DPK) and Inflation towards Return on Assets (ROA). This research was conducted at 13 Sharia Commercial Banks in Indonesia registered by Financial Services Authority of Indonesia (OJK) during 2012-2018. The analysis method used in this study is multiple linear regression analysis. The results showed that CAR and BOPO have significant effect towards ROA, while FDR, NPF, DPK and inflation have no significant effect towards ROA.