The Effect of CAR and NPF on the Profitability of Islamic Commercial Banks in Indonesia

This study aims to see the effect of Capital Adequacy Ratio (CAR) and Non Performing Financing (NPF) on profitability. The research methodology used in this research is quantitative using the IBM SPSS Statistics 26 program. Secondary data obtained from the annual report of Islamic Commercial Banks for the period 2018-2023. Sampling using purposive sampling technique with a total sample of 10 Islamic Commercial Banks. The research findings provide the fact that the Capital Adequacy Ratio (CAR) has an influence on profitability at Islamic Commercial Banks, meaning that banks are able to cover risks with their capital and banks do not experience difficulties in their operational activities so that banks are able to increase their profitability. Previously, we already knew the condition of Islamic Commercial Banks for the 2018-2023 period where CAR experienced an upward trend while ROA also experienced an upward trend, this shows that sufficient capital is able to finance operational activities economically and efficiently, so that banks do not experience difficulties besides that they can increase profits or profits. And the results of the study provide the fact that Non Performing Financing (NPF) has a negative effect on profitability, this shows that if the ratio of bad debts increases, the Return On Asset (ROA) will decrease.