The Impact of Financing Risk and Liquidity Ratio on Profitability in Islamic Commercial Banks

The purpose of this study is to investigate how the profitability ratio (return on assets, or ROA) in Islamic commercial banks is affected by financing risk (non-performing financing, or NPF) and liquidity risk (financing to deposit ratio, or FDR). Seven Islamic Commercial Banks were chosen using purposive sampling to make up the study's sample. Multiple linear regression analysis, aided by the E-Views application, is the analytical technique used. The findings show that whereas FDR has a large negative impact on profitability, NPF has no discernible effect. Concurrently, the F-test results show that FDR and NPF work together to significantly impact Islamic Commercial Banks' profitability (ROA).