The Impact of Financial Performance Indicators on Return on Equity: Evidence from Islamic Banks in Indonesia

Abstrak

ROE is a ratio that describes the profits given to company owners for the capital that has been invested. Based on the financial report of Bank BPRS, it is proven that the development of ROE has decreased significantly. This research uses a quantitative approach using the ECM (Error Correction Model) method. In 2022 there will be an increase in the DPK and CAR values ”‹”‹but this will not be followed by an increase in ROE. The research results show that in short and long term relationships the NPF and CAR variables have no effect on ROE. Meanwhile, the FDR and BOPO variables in the short and long term have an effect on ROE. Based on the results of short-term and long-term tests, the variables NPF, FDR, CAR and BOPO influence ROE simultaneously.