The Effect of CAR, FDR, NPF, and BOPO on ROA for BUS and BPRS in 2020–2024

Abstract

The Islamic banking industry in Indonesia continues to grow as an integral component of the national financial system, with bank soundness reflected through profitability indicators, particularly Return on Assets (ROA), which serve as important measures for stakeholders. This research examines the effects of Capital Adequacy Ratio (CAR), Financing to Deposit Ratio (FDR), Non-Performing Financing (NPF), and Operating Expenses to Operating Income (BOPO) on Return on Assets (ROA) in Islamic Commercial Banks (Bank Umum Syariah / BUS) and Islamic Rural Banks (Bank Pembiayaan Rakyat Syariah / BPRS) during the 2020–2024 period. A quantitative approach was employed using secondary data obtained from annual financial reports published by the Financial Services Authority (Otoritas Jasa Keuangan / OJK). The data were analyzed using multiple linear regression, preceded by classical assumption tests and followed by hypothesis testing through t-tests and F-tests. The results indicate that CAR has no significant effect on ROA, suggesting that capital adequacy in BUS and BPRS primarily functions as a risk mitigation buffer and a mechanism for fulfilling regulatory requirements rather than directly improving profitability. In contrast, FDR has a negative and statistically significant effect on ROA, indicating that higher financing levels relative to third-party funds may increase liquidity risk and operational costs, thereby reducing bank profitability. The findings also reveal that NPF has no significant effect on ROA, implying that problematic financing remains at manageable levels through allowance for impairment losses and financing restructuring policies. BOPO has no significant effect on ROA, indicating that operational efficiency in BUS and BPRS remained relatively stable during the study period and did not significantly influence profitability.