THE IMPACT ANALYSIS OF FINANCIAL RATIO TOWARDS PROFITABILITY OF INDONESIAN SHARIA BANKS (2014-2018) BY NOM (NET OPERATING MARGIN) AS A MEDIATION VARIABLE

Artika, Fitri Dwi (2019) THE IMPACT ANALYSIS OF FINANCIAL RATIO TOWARDS PROFITABILITY OF INDONESIAN SHARIA BANKS (2014-2018) BY NOM (NET OPERATING MARGIN) AS A MEDIATION VARIABLE. Other thesis, IAIN SALATIGA.

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Abstract

The tight competition between Islamic banks and conventional banks requires that Islamic banks must always improve their performance well to compete in the national banking market in Indonesia and create a bank with the principles of Islamic healthy and efficient. Banking performance is very important because banking is a trusted business, the bank must be able to show its credibility so that more people will be transacting with the bank, one of them is through increasing profitability. This study empirically investigates the impact analysis of financial ratio towards profitability of Indonesian Sharia Banks by NOM (Net Operating Margin) as mediation variable over the period from 2014 until 2018. Our research methodology is a descriptive statistic with a quantitative approach. The population is all of Sharia Banks listed at Financial Services Authority (OJK) in Indonesia which are 14 Sharia Banks. We use purposive sampling in this research and obtain 12 Sharia Banks. The type of our data is time-series of Indonesian Sharia Banks’ annual report from 2014 until 2018 and the source of our data is published secondary data. We collect our data using nonparticipant observation. In this research, we use the ratio scale. We apply Eviews 9 to analyze and process descriptive statistics, stationarity test, regression test, classic assumption test (normality test, multicollinearity test, autocorrelation test, heteroscedasticity test), and the goodness of fit test (determination coefficient, ttest, f-test). While SPSS 22 is used to analyze and process path analysis to detect the influence of the mediation variable in this research. The results show that CAR has no influence and insignificant effect on NOM, NPF has no influence and insignificant effect on NOM, OCOI has no influence and insignificant effect on NOM, FDR has a positive and significant effect on NOM, NOM has a positive and significant effect on ROA, NOM can not mediate the influence of CAR towards ROA, NOM can mediate the influence of NPF towards ROA, NOM can not mediate the influence of OCOI towards ROA, and NOM can not mediate the influence of FDR towards ROA.

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