The Role of Exchange Rate As a Moderating Variable in CAR, NPF and BOPO Influencing Profitability
Background: A bank's capacity to generate earnings on the goods produced by its daily operations is a crucial sign of its financial health. With the exchange rate serving as a moderating element. Purpose: The objective of this study is to ascertain how operating costs, CAR, NPF, and BOPO affect...
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| Format: | Article |
| Language: | Indonesian |
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Bogor Agricultural University
2025-01-01
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| Series: | Jurnal Aplikasi Bisnis dan Manajemen |
| Online Access: | https://journal.ipb.ac.id/index.php/jabm/article/view/54461 |
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| author | Desman Serius Nazara Dede Hertina Listiana Sri Mulatsih Alfiana Loso Judijanto |
| author_facet | Desman Serius Nazara Dede Hertina Listiana Sri Mulatsih Alfiana Loso Judijanto |
| author_sort | Desman Serius Nazara |
| collection | DOAJ |
| description | Background: A bank's capacity to generate earnings on the goods produced by its daily operations is a crucial sign of its financial health. With the exchange rate serving as a moderating element.
Purpose: The objective of this study is to ascertain how operating costs, CAR, NPF, and BOPO affect ROA.
Design/methodology/approach: Regression analysis is one of the quantitative methods used in the research process. As an illustration, take into account Islamic Commercial Banks that routinely release their financial reports for the years 2018–2022 and are listed on the Indonesia Stock Exchange. 35 samples from 7 different organizations were collected for this study using the purposeful sampling technique. The data was analyzed using partial least squares-structural equation modeling (PLS-SEM).
Findings/Result: The exchange rate, BOPO, and NPF all have a major effect on ROA. Meanwhile, the CAR has little effect on ROA in Islamic Commercial Banks between 2018 and 2022. The impact of exchange rates on ROA can be lessened for BOPO and NPF, but not for CAR, as the latter has no control over ROA
Conclusion: The study's conclusions demonstrate that the exchange rate, BOPO, and NPF all have a major effect on ROA. Meanwhile, the CAR has little effect on ROA in Islamic Commercial Banks between 2018 and 2022. The impact of exchange rates on ROA can be lessened for BOPO and NPF, but not for CAR, as the latter has no control over ROA. The establishment of an efficient capital adequacy ratio for Islamic banking is facilitated by this research, which enhances financial performance.
Originality/value (State of the art): The originality/value (State of the art) of this research is by providing empirical evidence about the importance of risk management and operational efficiency in determining the financial performance of Sharia Commercial Banks. On the other hand, this research also highlights that although capital is important, operational factors and credit risk are more dominant in influencing ROA.
Keywords: CAR, BOPO, NPF, ROA, Islamic Commercial Banks |
| format | Article |
| id | doaj-art-a588b587914d4d7698e62ff195cf84c9 |
| institution | Kabale University |
| issn | 2528-5149 2460-7819 |
| language | Indonesian |
| publishDate | 2025-01-01 |
| publisher | Bogor Agricultural University |
| record_format | Article |
| series | Jurnal Aplikasi Bisnis dan Manajemen |
| spelling | doaj-art-a588b587914d4d7698e62ff195cf84c92025-02-07T08:02:42ZindBogor Agricultural UniversityJurnal Aplikasi Bisnis dan Manajemen2528-51492460-78192025-01-01111999910.17358/jabm.11.1.9954461The Role of Exchange Rate As a Moderating Variable in CAR, NPF and BOPO Influencing ProfitabilityDesman Serius Nazara0Dede Hertina1Listiana Sri Mulatsih2Alfiana3Loso Judijanto4Akademi Kebidanan Harapan Keluarga; Jl. Yos Sudarso Ujung No.KM 6 5, Bawadesolo, Gunungsitoli, Gunungsitoli, North Sumatra 22813, IndonesiaStudy Program of Management, Universitas Widyatama; Jl. Cikutra No.204A, Sukapada, Cibeunying Kidul, Bandung, West Java 40125, IndonesiaStudy Program of Management, Universitas Bung Hatta; Jl. Sumatera Ulak Karang Padang, Sumatera Barat 25133, IndonesiaStudy Program of Management, Universitas Muhammadiyah Bandung; Jl. Soekarno-Hatta No.752, Cipadung Kidul, Panyileukan, Bandung, West Java 40614, IndonesiaIPOSS Jakarta Indonesia; Jl. Jendral Sudirman Kav. 86 Kelurahan Karet Tengsin, Tanah Abang, Central Jakarta 10220, IndonesiaBackground: A bank's capacity to generate earnings on the goods produced by its daily operations is a crucial sign of its financial health. With the exchange rate serving as a moderating element. Purpose: The objective of this study is to ascertain how operating costs, CAR, NPF, and BOPO affect ROA. Design/methodology/approach: Regression analysis is one of the quantitative methods used in the research process. As an illustration, take into account Islamic Commercial Banks that routinely release their financial reports for the years 2018–2022 and are listed on the Indonesia Stock Exchange. 35 samples from 7 different organizations were collected for this study using the purposeful sampling technique. The data was analyzed using partial least squares-structural equation modeling (PLS-SEM). Findings/Result: The exchange rate, BOPO, and NPF all have a major effect on ROA. Meanwhile, the CAR has little effect on ROA in Islamic Commercial Banks between 2018 and 2022. The impact of exchange rates on ROA can be lessened for BOPO and NPF, but not for CAR, as the latter has no control over ROA Conclusion: The study's conclusions demonstrate that the exchange rate, BOPO, and NPF all have a major effect on ROA. Meanwhile, the CAR has little effect on ROA in Islamic Commercial Banks between 2018 and 2022. The impact of exchange rates on ROA can be lessened for BOPO and NPF, but not for CAR, as the latter has no control over ROA. The establishment of an efficient capital adequacy ratio for Islamic banking is facilitated by this research, which enhances financial performance. Originality/value (State of the art): The originality/value (State of the art) of this research is by providing empirical evidence about the importance of risk management and operational efficiency in determining the financial performance of Sharia Commercial Banks. On the other hand, this research also highlights that although capital is important, operational factors and credit risk are more dominant in influencing ROA. Keywords: CAR, BOPO, NPF, ROA, Islamic Commercial Bankshttps://journal.ipb.ac.id/index.php/jabm/article/view/54461 |
| spellingShingle | Desman Serius Nazara Dede Hertina Listiana Sri Mulatsih Alfiana Loso Judijanto The Role of Exchange Rate As a Moderating Variable in CAR, NPF and BOPO Influencing Profitability Jurnal Aplikasi Bisnis dan Manajemen |
| title | The Role of Exchange Rate As a Moderating Variable in CAR, NPF and BOPO Influencing Profitability |
| title_full | The Role of Exchange Rate As a Moderating Variable in CAR, NPF and BOPO Influencing Profitability |
| title_fullStr | The Role of Exchange Rate As a Moderating Variable in CAR, NPF and BOPO Influencing Profitability |
| title_full_unstemmed | The Role of Exchange Rate As a Moderating Variable in CAR, NPF and BOPO Influencing Profitability |
| title_short | The Role of Exchange Rate As a Moderating Variable in CAR, NPF and BOPO Influencing Profitability |
| title_sort | role of exchange rate as a moderating variable in car npf and bopo influencing profitability |
| url | https://journal.ipb.ac.id/index.php/jabm/article/view/54461 |
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