Analysis of Financial Performance on Business Continuity of Islamic Credit Banks

Abstract

This study aims to examine and analyze the financial ratios included in Camel, namely CAR, NPL, NPM, and LDR as independent variables and one dependent variable which is proxied as the ROE ratio at Rural Banks in Kab. Tangerang which is registered with the Financial Services Authority (OJK). This type of research is quantitative using secondary data on annual financial reports. The population in this study amounted to 26 rural banks. Sampling using purposive sampling method. After sampling, the total number of BPRs was reduced to 23 BPRs that met the criteria to be included in the sample. This test was carried out by Descriptive Statistical Test, Classical Assumption Test (Normality Test, Multicollinearity Test, Autocorrelation Test, Heteroscedasticity Test) and Hypothesis Test using R2 Determinant Test, F Test and T test were processed using SPSS Software version 23. The results showed that CAR has a negative effect on ROE, NPL has no effect on ROE, NPM has a positive effect on ROE has a negative effect on ROE, and LDR has no effect on BPR performance proxied by ROE. This research is contributed to investors, companies and academics. However, this research still has some limitations, such as the object of research is only BPR Kab. Tangerang and not all camel ratios are used as variables. So for future researchers to be able to conduct research with broader objects such as national banks and add other camel ratios and or use other performance analysis methods such as Risk Profile, Good Corporate Governance, Earning and Capital (RGEC).

Keywords: CAMEL, Financial Performance, CAR, NPL, NPM, LDR, ROE, BPR, Kab. Tangerang

DOI: 10.7176/EJBM/15-15-02

Publication date:August 31^st 2023