Francinita Putri, Suryo Budi Santoso, Hadi Pramono

The Effect of Profit Sharing Ratio, Zakat Performance Ratio and Islamic Performance Ratio on Profitability with Financing to Deposite Ratio (FDR) as a Moderating Variable in Islamic Commercial Banks 2017-2023

Introduction

The effect of profit sharing ratio, zakat performance ratio and islamic performance ratio on profitability with financing to deposite ratio (fdr) as a moderating variable in islamic commercial banks 2017-2023. Investigate how profit sharing, zakat, and Islamic performance ratios, moderated by FDR, affect profitability in Indonesian Islamic commercial banks (2017-2023).

Abstract

In practice, the performance measurement of Islamic banks has only presented the performance of Islamic finance in a materialistic aspect, without revealing spiritual and social values. In fact, it is very important to measure the performance of Islamic finance to realize stakeholder trust. Therefore, this study was conducted to find out whether Islamic banks in Indonesia have been able to realize stakeholder trust. This study is a quantitative study with the population of Islamic Banking companies for the 2017-2023 period found in the OJK. The sample selection in this study used purposive sampling. The analysis method uses a panel data regression model using the E-views software 12. The results show that the zakat performance ratio and the zakat performance ratio with FDR moderation show an influence on profitability. Meanwhile, the profit sharing ratio and the Islamic performance ratio with FDR moderation have no influence on profitability.

Review

This paper addresses a highly relevant and timely topic concerning the comprehensive performance measurement of Islamic banks, moving beyond purely materialistic metrics to incorporate spiritual and social values. This is crucial for realizing stakeholder trust, a stated aim of the study, which is particularly pertinent in the context of Islamic finance. The chosen period (2017-2023) for Indonesian Islamic Commercial Banks provides a current and pertinent dataset for this analysis. The use of quantitative methods, specifically panel data regression with E-views, is an appropriate approach for examining these relationships over time, offering a robust framework for empirical investigation. The findings reveal interesting and somewhat nuanced insights into the determinants of profitability in Islamic banks. Notably, the Zakat Performance Ratio (ZPR) emerged as a significant factor influencing profitability, both directly and when moderated by the Financing to Deposit Ratio (FDR). This suggests that Zakat performance, representing a core spiritual and social tenet of Islamic finance, has a tangible, positive impact on a bank's financial bottom line, perhaps signaling strong ethical commitment or community engagement. Conversely, the Profit Sharing Ratio (PSR) and the broader Islamic Performance Ratio (IPR) were found to have no significant influence on profitability, even with FDR moderation. This unexpected result prompts further inquiry into the precise construction and operationalization of these latter ratios, or perhaps indicates that their impact on profitability is less direct or manifests over a longer timeframe compared to Zakat. While commendable in its ambition, the abstract also hints at areas for further detail and potential refinement. A critical limitation is the lack of specific definition and operationalization for the "Islamic Performance Ratio" and "Zakat Performance Ratio"; understanding their exact components would significantly strengthen the interpretation of the results and allow for replication. Furthermore, the abstract states the study's goal is to assess whether Islamic banks realize "stakeholder trust" but ultimately measures "profitability" as the dependent variable. While profitability can be an indicator of trust, a more direct measure or exploration of stakeholder perceptions might be beneficial to fully address the stated objective of understanding spiritual and social value realization. Future research could explore alternative dependent variables or incorporate qualitative insights to provide a more holistic understanding of stakeholder trust.

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