International Journal of Islamic Economics and Finance (IJIEF)
Vol 6, No 2 (2023): IJIEF Vol 6 (2), July 2023

Impact of Green Banking Implementation, Financial Performance, and Covid-19 Crisis on Islamic Bank Profitability in Indonesia

Ramdani Ramdani (Faculty of Economic and Business, Airlangga University, Surabaya
STAI Bhakti Persada, Bandung)

Imron Mawardi (Faculty of Economic and Business, Airlangga University, Surabaya)
Sulaeman Sulaeman (R-square Research Consulting, Bogor)



Article Info

Publish Date
01 Aug 2023

Abstract

The purpose of this research is to test empirically the impact of green banking implementation, financial performance, and Covid-19 crisis on Islamic bank profitability in Indonesia for the period of 2015-2021. This study uses two quantitative approaches, specifically static panel data method and dynamic panel data method (generalized method of moments or GMM). The secondary data used in this paper with a total sample of 10 Islamic commercial banks in Indonesia. This study finds that the implementation of Green Banking as the main determinant has a significant relationship to the profitability of Islamic Banks in Indonesia. The study also finds that financial performance variables such as CAR, NPF, and OEF show that contribution to the level of Islamic bank profitability in Indonesia. Further, other finding regarding the dummy crisis variable, Covid-19 crisis finds that a strong relationship to the Islamic bank profitability. It means that Covid-19 crisis will impact negatively to Islamic bank profitability in Indonesia. Based on the results of the robustness check, the model in this research is stated to be robust. The findings are expected to be useful for policy makers as well as for Islamic banking circles. Research results can be used as input in formulating policies in achieving sustainable development goals and economic and social recovery programs after the Covid-19 pandemic.

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Journal Info

Abbrev

ijief

Publisher

Subject

Economics, Econometrics & Finance

Description

International Journal of Islamic Islamic Economics and Finance (IJIEF) is a journal which is bianually issued (January and July) and initiated by International Program for Islamic Economics and Finance (IPIEF). The publisher of this journal is Universitas Muhammadiyah Yogyakarta. The publication of ...