The Effect Covid-19 and Sectoral Financing on Islamic Bank Profitability in Indonesia

Journal of Islamic Economic Laws

Adamu Abubakar Muhammad¹  Khoirul Umam²  Mohammad Zen Nasrudin Fajri²  Lila Prisilia Putri²  Mohammad Ali Ramadhan² 

[1] Federal University of Kashere;Universitas Darussalam Gontor;

关键词: covid-19;    profitability;    islamic bank;    business sector;    ardl;   

DOI  :  10.23917/jisel.v5i1.17181

来源: DOAJ

【 摘 要 】

COVID-19 pandemic has created a new economic crisis worldwide. Islamic Bank which was reportedly resilient against the financial crisis is expected to be stable in this period. Apart from that, Islamic Bank has channeled financing fund to various business sectors with different portions leading to a question whether they have different impact on Bank. This paper aims to discover the impact of COVID-19 pandemic and financing to business sectors on Islamic Bank profitability. An ARDL approach is employed for analysis. The result of the study shows that COVID-19 pandemic has a negative relationship with Islamic Bank profitability in the long-run. Furthermore, financing to transportation, warehousing and communication sectors is associated with higher profitability in the short-run. On the other hand, financing to wholesale and retail trade sectors hurt Islamic Bank profitability. Based on this result, it is suggested that Government impose some measures in stabilizing Islamic Bank’s performance during COVID-19 pandemic. In addition, Islamic Banks are expected to make adjustment on financing to business sectors ratio accordingly in order to maintain the profitability of Islamic Bank.

【 授权许可】

Unknown