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The effect of asset quality, profit and loss sharing on Sharia Banking Liquidity in Indonesia

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  • Anggraeni Anggraeni

    (Universitas Peradaban - Faculty of Economics and Business)

  • Yulis Maulida Berniz

    (Universitas Peradaban - Faculty of Economics and Business)

Abstract

This study aims to determine the effect of asset quality variables (Non-Performing Financing), Profit and Loss Sharing (profit-loss sharing investment and profit-sharing investment account), capital adequacy ratio, bank size, return on assets, and gross domestic product on Islamic banking liquidity in Indonesia. The analysis was conducted using a sample of 7 Islamic commercial banks from the period March 2015 to December 2019. This study uses 2 multiple regression models of panel data with the results showing that Non-Performing Financing, profit-loss sharing investment, bank size, gross domestic product affect the liquidity of Islamic banks. , then for-profit sharing investment account, capital adequacy ratio, return on assets, does not affect the liquidity of Islamic banks.

Suggested Citation

  • Anggraeni Anggraeni & Yulis Maulida Berniz, 2022. "The effect of asset quality, profit and loss sharing on Sharia Banking Liquidity in Indonesia," Technium Social Sciences Journal, Technium Science, vol. 27(1), pages 423-436, January.
    • Handle: RePEc:tec:journl:v:27:y:2022:i:1:p:423-436
    DOI: 10.47577/tssj.v27i1.5500
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    References listed on IDEAS

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    1. Kharisya Ayu Effendi & Disman Disman, 2017. "Liquidity Risk: Comparison between Islamic and Conventional Banking," European Research Studies Journal, European Research Studies Journal, vol. 0(2A), pages 308-318.
    2. Hichem Hamza & Zied Saadaoui, 2013. "Investment deposits, risk‐taking and capital decisions in Islamic banks," Studies in Economics and Finance, Emerald Group Publishing Limited, vol. 30(3), pages 244-265, July.
    3. repec:eme:sefpps:v:30:y:2013:i:1:p:244-265 is not listed on IDEAS
    4. Syed Ali, Salman, 2013. "State of Liquidity Management in Islamic Financial Institutions," Islamic Economic Studies, The Islamic Research and Training Institute (IRTI), vol. 21, pages 63-98.
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    More about this item

    Keywords

    Liquidity; Non Performing Financing; Profit and Loss Sharing; Capital Adequacy Ratio; Bank Size; Return On Assets; Gross Domestic Product;
    All these keywords.

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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