Factors Affecting Return on Assets at Bank Muamalat Indonesia in 2012-2021

Bank Muamalat has significantly decreased managerial profitability in the last six years compared to other Sharia Commercial Banks. Bank Muamalat of Indonesia experienced a decline in profitability that has no growth and continues to be restructured. Meanwhile, profitability is one of the benchmarks for the success of Sharia banking in managing its financial performance. The present study aims to analyze the simultaneous and partial effect of variables NPF, BOPO, CAR, FDR


Introduction
Sharia banking has become an alternative for In the banking sector, the financial performance of a bank is very important to maintain its reputation as a company that can be reliable. There will be more people who use banking products if its performance is financially strong. One of the efforts of Islamic banks in calculating its financial performance is to use the profitability ratio. The profitability ratio is used to assess the capacity of Sharia banking and track its growth over time. A Sharia banking with sufficient profitability will attract investors and shareholders' common stock (Ardiyanto et al., 2020).
Profitability is very important for Sharia banking because it serves as a measure of how effectively the institution uses available assets to generate profits.
Return on assets (ROA) is the profitability ratio used to evaluate the company's capacity to benefit (Saputra, 2016). ROA Sharia banking is often used as an aspect of the assessment of management capabilities in maximizing the value of holder shares to optimize the different rates of return and reduce existing risks.

A B S T R A C T
Bank Muamalat has significantly decreased managerial profitability in the last six years compared to other Sharia Commercial Banks. Bank Muamalat of Indonesia experienced a decline in profitability that has no growth and continues to be restructured. Meanwhile, profitability is one of the benchmarks for the success of Sharia banking in managing its financial performance. The present study aims to analyze the simultaneous and partial effect of variables NPF, BOPO, CAR, FDR, and TPF on the ROA of Bank Muamalat of Indonesia. This study implements a quantitative method using quarterly data from Bank Mumalat of Indonesia for the period 2012-2021. The technique used to analyze the data were the multicollinearity test, multiple regression analysis tests, and classical assumption test. The results of this study indicate that there is a simultaneous influence between the variables NPF, BOPO, CAR, FDR, and TPF to ROA. NPF shows a positive and significant value to Bank Muamalat's ROA. BOPO has a negative and significant effect on the ROA of Bank Muamalat. Furthermore, CAR has a positive and significant effect on Bank Muamalat's ROA. FDR has a positive and significant effect on ROA. FDR in this study has the greatest influence over other variables with a t-count value of 3.922, which is smaller than t-  (Dendawijaya, 2009). In addition, in increasing the Bank's profitability, it earns income in the form of funds collected directly from the community called Third Party Funds (TPF) (Muhammad, 2005). NPF is one of the associated risks with financing that must be faced by the Bank. From time to time, as the number of non-performing debts increases, the total income will decrease and will affect the ROA obtained by the Bank (Muhaemin, 2016). Non-current financing is calculated by using the NPF ratio. Banks generate more income if NPF is low.
The efficiency ratio of the Bank's operational performance is called the ratio of Operating Costs to Operating Income (BOPO). The level of efficiency and capacity of the Bank in carrying out its activities is rated by using the ratio of operating costs. More banks effectively control BOPO if the value of BOPO decreases. This has an impact on increasing the value of profits which in turn also affects the increase in ROA (Kasmir, 2012).
CAR reflects the Bank's capital. The bigger CAR, the greater the ROA because management banks are more flexible in allocating capital for profitable investment activities when the Bank has a large amount of capital (Umam, 2013). Because bank management has a lot of flexibility when allocating a large amount of capital for profitable investment operations, CAR will have an effect on an increase in ROA.
The ratio of loans to deposits or known as FDR, is one of the factors related to ROA. FDR works to measure the ability of a bank to pay off short-term debt outstanding debt tempo (Rivai, 2007). High FDR ratios indicate that the Bank lent money or is relatively bankrupt. A low ratio, on the other hand, indicates that the Bank has highly liquid assets available for loan.
Bank's ability to use funds from third parties to fund activities operation is one of the indicators of the success of the Bank. These funds are the most significant source of funding for banks. Where ROA increases along with the increase in third-party funds, Bank's ability to collect more money from the community can increase the possibility of granting credit, which has an impact on the income of Bank Muamalat Indonesia.
Research conducted by Wibisono (2017) examines that significantly CAR, NPF, BOPO, and FDR can affect the value of ROA. Next, the results of research conducted by Dasari et al. (2020), stated that the use of third-party funds has no impact on ROA. It needs further research on the effect of NPF, BOPO, CAR, FDR, and third-party funds on ROA, considering the differences in conclusions from other studies.
This study aims to assess how good the performance of Bank Mumalat of Indonesia is, according to NPF, BOPO, CAR, FDR, and TPF to ROA.
One of the elements that affect the level of bank health is the company's ability to generate profits over a period of time specified, which is determined by profitability. A variable tied to financial ratio indicators that are used is the return on assets. Because Bank Indonesia prioritizes the profitability of banks that are measured from its assets as banking supervisors and regulators, then in this study, ROA is used as the dependent variable.

Literature Review
A bank or other financial organization called Riba operates according to the Sharia standards of the Qur'an and Hadith. Thus, a sharia bank is a financial institution or banking operation that collects and distributes funds and other services in order to carry out its operational activities in accordance with Islamic Sharia and prudential principles. One of the tools used to enforce sharia economic principles is the Sharia Bank. In their daily operations, sharia banks do not use interest or usury (Muhammad, 2005).
Based on the operations of Islamic banks, there are 3 principles for serving customers which are maintained by a banker, namely: the principle of justice, the principle of equality, and the principle of peace (Fahmi, 2015).
The Bank's financial performance serves as a measure to evaluate business with reporting practices and sound finances. Calculation of financial performance in Sharia banking, among others, using Bank Indonesia approach No.9/1/7PBI/2007 to assess the soundness of the Bank in accordance with sharia principles, namely: capital ratios, productive asset quality ratios, profitability ratios, and profitability ratios (Kusumo, 2018). The following sorts of profitability measures are frequently used in financial accounting to evaluate a company's capacity to earn profits: return on assets (Muhammad, 2005).
ROA is a measure of bank profitability. ROA is used to measure the company's effectiveness in generating profits by using the assets they have. ROA is a ratio that shows the ratio of profit (before tax) to the Bank's total assets. This ratio is used to assess the financial condition of a company by using a certain scale or a tool to assess whether all assets owned by the company have been used to the maximum extent possible for profit .
Non-performing financing (NPF) is the rate of return of credit, which is the return of credit given by depositors to banks; in other words, NPF is the level of bad loans at the Bank. NPF is determined by adding non-current financing to total financing. If the NPF is lower, the Bank's profits will be higher. On the other hand, if the NPF level is high, the Bank will experience a loss caused by the rate of return on bad loans, so smaller profits can affect ROA (Riyadi, 2006).

Non-performing financing (NPF) measures the
Bank's level of subprime loans by measuring the rate of return on credit or the return of credit granted by depositors to banks. By dividing non-current funding by total finance, NPF is determined. The Bank's earnings will increase if the NPF is lower, but if the NPF level is high, the Bank will incur losses due to the rate of return on bad loans, causing smaller profits to affect ROA.
Operational costs and operating income are compared using the BOPO, or operating expense ratio.
The ratio of operational costs is used to gauge a body's level of effectiveness and capacity to carry out operating activities. As a result of cost efficiency, the Bank will be able to earn more money, which will raise the value of the ROA ratio. The lower the BOPO, the better the Bank is at managing its operational costs (Rivai et al., 2013).
The operational costs and operating income calculation is used to determine the number of operating costs and average operating income paid by the Bank, as well as to measure the efficiency of bank activities. The lower this ratio, the lower the operational costs incurred by the Bank in question. So that the Bank's profits will be even greater, the value of the BOPO ratio will be seen as efficiency. If the BOPO ratio value is more than 90% or close to 100%, it is declared inefficient, but if the BOPO ratio value is below 90%, it is declared efficient (Dendawijaya, 2009).
The capital adequacy ratio (CAR) is a measurement of the proportion of all bank assets that are financed either from the Bank's own capital funds or from outside sources, such as funds raised from funds, and includes all risky assets (credit, investments, securities, and claims against other banks) (debt). A bank's capital to sustain risky assets is determined by the CAR, a bank performance ratio. The profit earned by the bank increases in line with the value of the capital adequacy ratio. In other words, the Bank will benefit more from the lower risk for the company.
If the Bank has enough capital to cover inevitable losses, it will be able to manage all of its operations effectively, increasing both the Bank's value and shareholder wealth. The capital adequacy ratio is a measure of a bank's capacity to offset the loss of assets brought on by hazardous asset losses. Therefore, when capital increases alone, the Bank's health, as measured by its capital ratio (CAR), improves.
Additionally, as capital increases, so does the possibility for corporations to make a profit.
The FDR is the ratio of the Bank's total amount of credit provided to its total amount of cash received.
This ratio demonstrates how much the Bank can rely on loans as a source of liquidity in order to repay depositor withdrawals. Therefore, a larger ratio signifies a lesser level of liquidity capacity for the concerned Bank.
The high and low FDR ratios indicate the level of liquidity of the Bank. In accordance with the agreement of the Indonesian Sharia banking Association (Asbisindo) in assessing the level of bank liquidity, the ideal FDR is in the range of 80% to a maximum of 90%, which is considered a healthy FDR ratio. The higher the FDR number of a bank, the more it is described as a less liquid bank compared to a bank with a smaller FDR ratio. On the other hand, if the ratio is low, it shows that the Bank is less effective in channeling credit. If the Bank has a ratio of 75%, it means that the Bank only distributes 75% of the funds that can be raised. And if the FDR ratio reaches 100%, the Bank is said to be channeling funds beyond the funds that have been collected.
Distributed funds by the Bank will generate profits for the Bank if the Bank disburses more funds in the form of financing, the higher profit. The increase in profit will affect the return on assets at the Bank. So it can be said that FDR has a positive relationship with ROA, where when FDR increases, it will have an impact on increasing ROA. On the other hand, a decrease in FDR will have an impact on a decrease in

FDR.
A bank's attempt to obtain public funds is known as Third Party Funds (TPF). Whether these funds come from public deposits or from other institutions depends on the Bank itself. Then, money can be obtained through its own capital, specifically by issuing or selling shares, to finance its activities. The way that money is acquired depends on what it will be used for. The amount of cost incurred will depend on the funding sources chosen. Consequently, it's important to choose funding sources carefully (Kasmir, 2014).
One of the main ways Islamic banks provide funds to the public is through third-party funds (TPF).
Islamic banks can use funds from third parties to be placed in posts that generate income for the Bank, one of which is in the form of credit. Muhammad is of the opinion that an increase in third-party funds will result in large credit growth so that bank profitability will increase (Anshori, 2007). (2017) examines how significantly CAR, NPF, BOPO, and FDR are able to affect the ROA value. Another study by Rembet et al. (2020) stated that BOPO has no significant effect on return on assets (ROA). Further research by Widyastuti et al. (2021) shows that CAR has no effect on return on assets (ROA). Another study explains that FDR does not partially affect the profitability of Islamic Commercial Banks. Third-party funds affect the profitability of state-owned banks (Tofan et al., 2022).

Research conducted by Wibisono
Financial ratio analysis, which should be done regularly, can help Islamic banks uncover efficiency measures and repair. In this type of financial accounting, ROA is a type of profitability ratio that is often used to assess the company's ability to make a profit.

Methods
This study quantitatively measures the effect of NPF, BOPO, CAR, FDR, and third-party funds on ROA.  (Ghozali, 2013). Test autocorrelation is used to assess whether in a model there is a correlation in the regression model multiple linear.

Results and Discussion
The variables used in this study are NPF, BOPO, CAR, FDR, and TPF to Bank Muamalat's ROA for the period 2012-2021. The following is a description of the data in this study.  ROA is a ratio used to see the level of effectiveness of the use of assets to make a profit. Profitability for banking going public like Bank Muamalat Indonesia, it is more appropriate to use return on assets (ROA). This is because ROA focuses more on the ability of banks to earn earnings in company operations.
Judging from the results, this research is in line with the theory (Dendawijaya, 2009) and (Muhammad, 2005)  TPF has no effect on Bank Muamalat's ROA.
Contrary to research (Muhammad 2005) that thirdparty funds are the most important source of funds for banks in financing their operational activities (Anshori 2007), activities are a sign of financial success. Whereas a high ROA will increase with a higher third-party fund. The findings of this study concur with a study by Murhadi (2011), who found no relationship between third-party funds and ROA.
TPF has no effect on the ROA of Muamlat Bank due to an imbalance between the number of sources of funds that enter and the amount of credit thrown out to the public. The higher the third-party funds collected in the Bank but not matched by lending, the greater the possibility of the Bank experiencing a loss or a decrease in profitability so that the return on assets or the effectiveness of the Bank in obtaining profits also decreases because interest income from lending to debtors is not sufficient to cover costs.
Interest is to be paid to depositors.

Conclusion
All of the variables of NPF, BOPO, CAR, FDR, and TPF can affect the ROA value of Bank Muamalat Indonesia at the same time. NPF, BOPO, and TPF have no effect on ROA at Bank Mumalat Indonesia.
Partially, NPF has a significant positive effect on ROA with a t-count value greater than t- Bank Muamalat is expected to maintain the level of capital adequacy to support the Bank's financial, and operational activities. Muamalat will increase in distribution and financing. Bank Muamalat must pay attention to and monitor the movement of the ratio so that it is at an efficiency level that can generate optimal profits in a healthy bank. Performance in the FDR ratio must continue to be improved so that the ratio in the ability to provide and distribute financing can have a good impact on banks.