THE INFLUENCE OF FINANCIAL PERFORMANCE ON LIQUIDITY RISK MANAGEMENT IN ISLAMIC BANKS

Hardiansah hardi; Rokhmad Subagyo; Mohammad  Aswad; Binti Nur Asiyah

doi:10.70062/incoils.v5i1.331

Authors

Hardiansah hardi PASCASARJANA UNIVERSITAS ISLAM NEGERI SAYYID ALI RAHMATULLAH TULUNGAGUNG
Rokhmad Subagyo UIN Sayyid Ali Rahmatullah Tulungagung
Mohammad Aswad UIN Sayyid Ali Rahmatullah Tulungagung
Binti Nur Asiyah UIN Sayyid Ali Rahmatullah Tulungagung

DOI:

https://doi.org/10.70062/incoils.v5i1.331

Keywords:

Financial Performance, Liquidity Risk, Islamic Banks, ROA, ROE

Abstract

The aim of this study is to examine the degree to which Indonesian Islamic banks' ability to manage is impacted by their financial performance liquidity risk. The financial performance indicators utilized in this study include the Cost to Income Ratio (CIR), Return on Assets (ROA), Return on Equity (ROE), and Net Interest Margin (NIM), while the liquidity ratio of the banks serves as a proxy for liquidity risk. Utilizing secondary data drawn from Islamic institutions' Financial Services Authority-registered financial statements (OJK) during the period from 2019 to 2024, this Research uses multiple linear the regression process as part of a quantitative methodology. The outcomes of this research reveal that, although CIR and NIM do not exert a significant impact on liquidity risk, ROA and ROE do indeed have a notable effect. These findings imply that profitability constitutes a critical determinant in the formulation of liquidity management strategies.

Author Biographies

Rokhmad Subagyo, UIN Sayyid Ali Rahmatullah Tulungagung

The aim of this study is to examine the degree to which Indonesian Islamic banks' ability to manage is impacted by their financial performance liquidity risk. The financial performance indicators utilized in this study include the Cost to Income Ratio (CIR), Return on Assets (ROA), Return on Equity (ROE), and Net Interest Margin (NIM), while the liquidity ratio of the banks serves as a proxy for liquidity risk. Utilizing secondary data drawn from Islamic institutions' Financial Services Authority-registered financial statements (OJK) during the period from 2019 to 2024, this Research uses multiple linear the regression process as part of a quantitative methodology. The outcomes of this research reveal that, although CIR and NIM do not exert a significant impact on liquidity risk, ROA and ROE do indeed have a notable effect. These findings imply that profitability constitutes a critical determinant in the formulation of liquidity management strategies.

Mohammad Aswad, UIN Sayyid Ali Rahmatullah Tulungagung

The aim of this study is to examine the degree to which Indonesian Islamic banks' ability to manage is impacted by their financial performance liquidity risk. The financial performance indicators utilized in this study include the Cost to Income Ratio (CIR), Return on Assets (ROA), Return on Equity (ROE), and Net Interest Margin (NIM), while the liquidity ratio of the banks serves as a proxy for liquidity risk. Utilizing secondary data drawn from Islamic institutions' Financial Services Authority-registered financial statements (OJK) during the period from 2019 to 2024, this Research uses multiple linear the regression process as part of a quantitative methodology. The outcomes of this research reveal that, although CIR and NIM do not exert a significant impact on liquidity risk, ROA and ROE do indeed have a notable effect. These findings imply that profitability constitutes a critical determinant in the formulation of liquidity management strategies.

Binti Nur Asiyah, UIN Sayyid Ali Rahmatullah Tulungagung

The aim of this study is to examine the degree to which Indonesian Islamic banks' ability to manage is impacted by their financial performance liquidity risk. The financial performance indicators utilized in this study include the Cost to Income Ratio (CIR), Return on Assets (ROA), Return on Equity (ROE), and Net Interest Margin (NIM), while the liquidity ratio of the banks serves as a proxy for liquidity risk. Utilizing secondary data drawn from Islamic institutions' Financial Services Authority-registered financial statements (OJK) during the period from 2019 to 2024, this Research uses multiple linear the regression process as part of a quantitative methodology. The outcomes of this research reveal that, although CIR and NIM do not exert a significant impact on liquidity risk, ROA and ROE do indeed have a notable effect. These findings imply that profitability constitutes a critical determinant in the formulation of liquidity management strategies.

References

(OJK)., Otoritas Jasa Keuangan. “Laporan Perkembangan Perbankan Syariah,” 2021.

———. “Laporan Tahunan OJK 2022,” 2022.

———. “Laporan Tahunan Perbankan Syariah 2024.,” 2023.

Abduh, M., & Omar, M. A. “Islamic Banking and Financial Stability: A Case Study of Malaysia.” International Journal of Islamic and Middle Eastern Finance and Management 5, no. 3 (2012): 227-241.

Ali, F., & Hasan, M. “Pengaruh Reputasi Dan Kepuasan Nasabah Terhadap Kinerja Keuangan Bank Syariah.” Jurnal Manajemen Dan Kewirausahaan 10, no. 2 (2022): 75-88.

Arifin, M., & Rahman, A. “The Relationship Between Capital Adequacy Ratio and Liquidity Risk Management in Islamic Banking.” Journal of Islamic Banking and Finance 10, no. 1 (2023): 23-37.

Bader, M. K. I., et al. “The Impact of Bank-Specific and Macroeconomic Factors on the Profitability of Islamic Banks.” International Journal of Islamic and Middle Eastern Finance and Management 3, no. 4 (2010): 373-392.

Brigham, E. F., & Ehrhardt, M. C. Financial Management: Theory & Practice. Cengage Learning., 2016.

BSI. “Laporan Keuangan Triwulan II 2023,” 2023.

———. “Laporan Tahunan Bank Syariah Indonesia 2022,” 2022.

Hasan, Z., & Dridi, J. “The Impact of Financial Performance on Liquidity Risk Management in Islamic Banks.” International Journal of Islamic Finance 13, no. 2 (2021): 145-160.

Indonesia., Bank. “Laporan Ekonomi Dan Keuangan,” 2022.

———. “Laporan Perkembangan Bank Syariah 2022.” Jakarta: Bank Indonesia., 2022.

Ismail, A., & Kamarudin, M. “The Impact of Financial Performance on Liquidity Risk Management in Islamic Banks.” Journal of Islamic Finance, 10, no. 1 (2021): 45-60.

Khan, T., & Ahmed, H. “Risk Management: An Analysis of Issues in Islamic Financial Industry.” Islamic Development Bank., 2001.

Masyita, A., et al. “The Impact of Liquidity Risk Management on Financial Performance of Islamic Banks in Indonesia.” Journal of Islamic Finance 11, no. 2 (2022): 45-59.

Masyita, D., & Rahman, A. “The Effect of Financial Performance on Liquidity Risk in Islamic Banking: Evidence from Indonesia.” Journal of Islamic Banking and Finance 8, no. 2 (2022): 45-60.

Nasional., Dewan Syariah. “Fatwa Tentang Manajemen Risiko Di Bank Syariah.” Jakarta: Dewan Syariah Nasional., 2021.

Nasution, A. F., & Bahri, S. “The Influence of Financial Ratios on Liquidity Risk in Islamic Banking.” Journal of Islamic Finance 8, no. 1 (2019): 1-15.

Nurdin, M., & Rahman, A. “Analisis Pengaruh Likuiditas Terhadap Kinerja Keuangan Bank Syariah.” Jurnal Ekonomi Dan Bisnis Islam 5, no. 2 (2021): 150-162.

OJK. “Laporan Perkembangan Perbankan Syariah Di Indonesia,” 2021.

Rachmawati, D., & Yulianto, A. “Pengaruh Kinerja Keuangan Terhadap Manajemen Risiko Likuiditas Pada Bank Syariah Di Indonesia.” Jurnal Ekonomi Dan Keuangan Syariah 3, no. 2 (2019): 123-135.

Rahman, M. A., & Ali, M. “Liquidity Management in Islamic Banking: An Empirical Study.” 5, no. 2 (2020): 25-38.

Sari, R., & Hidayat, R. “Perbandingan Kinerja Keuangan Bank Syariah Dan Bank Konvensional Di Indonesia.” Jurnal Akuntansi Dan Keuangan 11, no. 1 (2023): 45-60.

Sari, R. & Putri, A. “Analisis Pengaruh Kinerja Keuangan Terhadap Manajemen Risiko Likuiditas Pada Bank Syariah Di Indonesia.” Jurnal Ekonomi Dan Bisnis Islam 5, no. 2 (2021): 123-145.

Supervision., Basel Committee on Banking. “Principles for Sound Liquidity Risk Management and Supervision,” 2010.