Islamic banks in Indonesia: Profitability and Islamic social accountability reporting

Abstract

This study aims to determine the determinant variable of profitability by examining the effect of efficiency, liquidity, company size, and the determinants of Islamic social reporting. The research approach is carried out with a quantitative approach. In contrast, the explanatory research method explains the effect of the independent variable on the dependent variable through hypothesis testing and path analysis. The sampling method is purposive sampling with a sample size of Islamic banks in Indonesia from 2018 to 2020 that have reported social responsibility banking activities. Meanwhile, the analysis tool used is the path analysis approach. The study results found that efficiency had a negative effect on profitability and had no impact on Islamic social reporting, liquidity had a positive effect on profitability and had no impact on Islamic social reporting, and company size had no effect on profitability and had no impact on Islamic social reporting, and profitability. So that banks, in increasing profitability, must be able to increase efficiency in managing short-term liabilities and assets in banks.