Factors Affecting Financing Against Profitability With Non -performing Financing As A Moderating Variable In The North Sumatra Bank Sharia Business Unit In North Sumatra

Feb 27, 2025 by ADMIN 170 views

Factors Affecting Financing on Profitability with Non-Performing Financing as Moderating Variables in the North Sumatra Bank Sharia Business Unit in North Sumatra

Introduction

In the world of Islamic banking, especially in the North Sumatra Bank of the Sharia Business Unit (UUS), there are a variety of products produced through various types of contracts. Efficient fund raising strategies are crucial for banks to optimize the cost of collecting funds and generate optimal income. Sharia financing must be directed to sectors that have a low risk, especially in the preparation of the North Sumatra Bank's spin-off planned in 2018. This study aims to analyze the effect of third party funds (DPK) and Capital Adequacy Ratio (CAR) on financing, as well as the effect of DPK, CAR, and Return on Assets (ROA) on bank profitability by testing whether or not the non-performing financing (NPF) as a moderation variable.

Background

Islamic banking has been growing rapidly in recent years, and the North Sumatra Bank Sharia Business Unit (UUS) is one of the leading players in this industry. The bank offers a variety of products and services, including current accounts, savings accounts, and financing services. However, the bank faces challenges in managing its finances and generating optimal profits. Effective management of risks is crucial for the bank to achieve its goals and sustain its growth.

Methodology

This study used a panel data regression analysis to examine the effect of DPK and CAR on financing, as well as the effect of DPK, CAR, and ROA on bank profitability. The data used included year-end financial statements from five North Sumatra Bank UUS branch offices during the 2010 to 2015 period. The methods applied in the analysis were panel data regression, moderation regression, and path analysis, which was carried out using EViews software.

Research Result

The results showed that third party funds had a statistical significant effect on financing at a significance level of 5%. However, CAR did not show a significant effect on financing. In addition, although DPK and CAR have a statistically significant influence on financing, the DPK itself does not significantly affect ROA when financing acts as an intervening variable. Likewise, CAR also has no significant effect on ROA with financing as an intervening variable. The influence of financing on ROA, with the NPF moderation variable, is also not statistically significant. Furthermore, the effect of a combination of DPK, CAR, and financing on ROA, with NPF as a moderation variable, also does not show significance at the 5% level.

Implications for North Sumatra Bank Uus

The implications of this study are very important for the North Sumatra Uus Bank. This finding emphasizes that attention to the risk of financing is crucial to generate optimal profits. In addition, banks need to oversee micro and macroeconomic factors that can influence financing decisions. By understanding this dynamics, the North Sumatra Uus Bank can improve a more productive financing strategy, which not only benefits the bank itself but also provides benefits for customers and the economy as a whole.

Conclusion

In conclusion, this study provides valuable insights into the factors that affect financing on profitability in the North Sumatra Bank Sharia Business Unit. The results of this study highlight the importance of effective management of risks and operational efficiency in achieving optimal profits. The findings of this study also emphasize the need for banks to oversee micro and macroeconomic factors that can influence financing decisions. By understanding this dynamics, the North Sumatra Uus Bank can improve a more productive financing strategy, which not only benefits the bank itself but also provides benefits for customers and the economy as a whole.

Recommendations

Based on the findings of this study, the following recommendations are made:

Improve risk management: The North Sumatra Uus Bank should improve its risk management practices to minimize the risk of non-performing financing.
Enhance operational efficiency: The bank should enhance its operational efficiency to reduce costs and improve profitability.
Monitor micro and macroeconomic factors: The bank should monitor micro and macroeconomic factors that can influence financing decisions to make informed decisions.
Develop a more productive financing strategy: The bank should develop a more productive financing strategy that takes into account the factors that affect financing on profitability.

Limitations of the Study

This study has several limitations. Firstly, the study only examined the effect of DPK and CAR on financing, as well as the effect of DPK, CAR, and ROA on bank profitability. Secondly, the study only used data from five North Sumatra Bank UUS branch offices during the 2010 to 2015 period. Finally, the study only examined the effect of NPF as a moderation variable.

Future Research Directions

Future research should examine the effect of other factors on financing on profitability, such as the effect of interest rates and inflation on financing. Additionally, future research should examine the effect of other moderation variables, such as the effect of credit risk and liquidity risk on financing.

Conclusion

Introduction

In our previous article, we discussed the factors that affect financing on profitability in the North Sumatra Bank Sharia Business Unit. We examined the effect of third party funds (DPK) and Capital Adequacy Ratio (CAR) on financing, as well as the effect of DPK, CAR, and Return on Assets (ROA) on bank profitability. We also discussed the implications of our findings for the North Sumatra Uus Bank. In this article, we will answer some of the most frequently asked questions about our study.

Q: What is the main finding of your study?

A: The main finding of our study is that third party funds (DPK) have a significant effect on financing, but Capital Adequacy Ratio (CAR) does not. Additionally, although DPK and CAR have a statistically significant influence on financing, the DPK itself does not significantly affect ROA when financing acts as an intervening variable.

Q: What are the implications of your findings for the North Sumatra Uus Bank?

A: Our findings emphasize the importance of effective management of risks and operational efficiency in achieving optimal profits. The North Sumatra Uus Bank should improve its risk management practices to minimize the risk of non-performing financing. The bank should also enhance its operational efficiency to reduce costs and improve profitability.

Q: What are the limitations of your study?

A: Our study has several limitations. Firstly, we only examined the effect of DPK and CAR on financing, as well as the effect of DPK, CAR, and ROA on bank profitability. Secondly, we only used data from five North Sumatra Bank UUS branch offices during the 2010 to 2015 period. Finally, we only examined the effect of NPF as a moderation variable.

Q: What are the future research directions?

A: Future research should examine the effect of other factors on financing on profitability, such as the effect of interest rates and inflation on financing. Additionally, future research should examine the effect of other moderation variables, such as the effect of credit risk and liquidity risk on financing.

Q: How can the North Sumatra Uus Bank improve its risk management practices?

A: The North Sumatra Uus Bank can improve its risk management practices by:

Conducting regular risk assessments to identify potential risks and mitigate them.
Implementing effective credit risk management practices to minimize the risk of non-performing financing.
Enhancing its operational efficiency to reduce costs and improve profitability.
Developing a more productive financing strategy that takes into account the factors that affect financing on profitability.

Q: How can the North Sumatra Uus Bank enhance its operational efficiency?

A: The North Sumatra Uus Bank can enhance its operational efficiency by:

Implementing effective cost management practices to reduce costs and improve profitability.
Enhancing its technology and infrastructure to improve efficiency and reduce costs.
Developing a more productive financing strategy that takes into account the factors that affect financing on profitability.
Improving its human resources management practices to improve employee productivity and efficiency.

Q: What are the benefits of effective risk management and operational efficiency for the North Sumatra Uus Bank?

A: Effective risk management and operational efficiency can benefit the North Sumatra Uus Bank in several ways, including:

Improved profitability: By minimizing the risk of non-performing financing and enhancing operational efficiency, the bank can improve its profitability.
Increased customer satisfaction: By providing better services and products, the bank can increase customer satisfaction and loyalty.
Improved reputation: By demonstrating effective risk management and operational efficiency, the bank can improve its reputation and credibility.
Increased competitiveness: By being more efficient and effective, the bank can increase its competitiveness in the market.

Conclusion

In conclusion, our study provides valuable insights into the factors that affect financing on profitability in the North Sumatra Bank Sharia Business Unit. We hope that our findings will be useful to the North Sumatra Uus Bank and other banks in the industry. We also hope that our study will contribute to the development of effective risk management and operational efficiency practices in the banking industry.