Measuring Financial Performance Islamic Banking During the Covid-19 Pandemic and its Determinant Factors

Wahyuni, Sri and Aidah, Risa Nur (2022) Measuring Financial Performance Islamic Banking During the Covid-19 Pandemic and its Determinant Factors. IOSR Journal of Economics and Finance (IOSR-JEF), 13 (2). pp. 10-17. ISSN 2321-5933

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Abstract

Background: The COVID-19 pandemic has contributed to the global economic downturn, including in Indonesia. The COVID-19 pandemic has had an impact on corporate financial performance, including the banking industry. This study aims to measure financial performance as proxied by Return on Assets during the COVID-19 pandemic; test and find empirical evidence of financial performance determinants such as thirdparty funds, company size, board of directors size, and sharia supervisory board size. This study's population consists of Islamic Commercial Banks that are registered with the Financial Services Authority (OJK). Materials and methods: This study relied on secondary data from quarterly reports. The purposive sampling technique was used, and a sample of 87 companies was obtained. Multiple regression analysis was used to analyze the data with the SPSS program. Results: The F test results yielded a significance level of 0.000 0.05. We can conclude that third-party funds, company size, board of directors size, and sharia supervisory board size all have an impact on financial performance. This outcome indicates that the research model is well-fitting. Individual sample test (t-test) results show that firm size has a positive effect on financial performance, third party funds and the size of the board of directors have a negative impact on financial performance, and the size of the sharia supervisory board has no effect on financial performance. Conclusion: The findings of this study provide insight into the financial performance of Islamic banking during the fluctuating covid pandemic. The size of the bank is the most important factor influencing its performance because, with its assets, Islamic banking can cover losses due to bad financing.

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