Al-bank: Journal of Islamic Banking and Finance
Vol 5, No 2 (2025): July - Desember 2025

Determinants of Return on Equity in Sharia Bank in Indonesia

Daulay, Muhammad Apis (Unknown)
Satriana, Desmi (Unknown)
Ardiansyah, Misnen (Unknown)



Article Info

Publish Date
14 Jul 2025

Abstract

This study examines the influence of several financial indicators Firm Size, BOPO, NOM, DER, FDR, DPK, NPF, and CAR on Return on Equity (ROE) in Indonesian Sharia Banks from 2013 to 2022. Using a quantitative approach with secondary data sourced from the Financial Services Authority (FSA) and banks’ annual reports, the study employed panel data regression with model selection among Common Effect Model (CEM), Fixed Effect Model (FEM), and Random Effect Model (REM). The REM was identified as the most suitable model. The results reveal that NOM and DPK have a positive and significant impact on ROE, while BOPO, DER, and NPF negatively and significantly affect ROE. These findings offer insights into optimizing financial strategies in Islamic banking in Indonesia

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Journal Info

Abbrev

Albank

Publisher

Subject

Religion Economics, Econometrics & Finance Social Sciences

Description

Al-Bank: Journal of Islamic Banking and Finance is a journal that publishes research results related to the themes of Islamic Banking and Finance. It also provides an important role in promoting the process of knowledge, values and skills. Scientific texts that discuss the topics of Islamic Banking ...