Impact Of Financial Risks and Inflation On Financial Performance Of Sharia Banks (Empirical Study on Islamic Commercial Banks in Indonesia 2016-2020 Period)

Abstract

The purpose of this study was to examine the effect of financial risk and inflation on financial performance. The sample of this study is Islamic banking companies registered with the financial services authority (OJK) during the 2016-2020 research period. The data analysis method used is multiple linear regression analysis with eviews 12.0 application tools. The results showed that (1) liquidity risk proxied by financing to deposit ratio (FDR) did not significantly affect return on assets (ROA), (2) credit risk proxied by non-performing financing (NPF) had a negative and significant effect on return on assets (ROA), (3) capital risk proxied by the capital adequacy ratio (CAR) has a positive and significant effect on return on assets (ROA, (4) inflation does not significantly affect return on assets (ROA)