The Effect of Capital Adequacy Ratio (CAR), Operating Expenses and Operating Income (BOPO), and Net Core Operating Margin (NCOM) on Financial Sustainability Ratio (FSR) in Islamic Banking in Indonesia for the 2017-2021 Period

ABSTRACT


INTRODUCTION
The onset of the economic crisis in 1997 has resulted in bankruptcies in several banks.At that time Islamic banking could survive because it had advantages by applying the principle of profit sharing as a basis in its operational activities and prohibiting interest.To develop and maintain the stability of the country's economy, the existence of bank institutions including Sharia Commercial Banks is currently very necessary.Therefore, banks must still be able to carry on their business in the long term (going concern) to keep it sustainable It's not just momentary interests.(Saputri, 2019) Sustainability issues are the highest priority for banks in the continuity of their operations related to the sustainability of product and service development.Good bank sustainability, especially from the financial side, will affect bank performance, and keep banks from bankruptcy risk in the long run.(Nurhikmah & Rahim, 2021) To assess sustainable finance, a financial analysis is needed.Financial Sustainability Ratio (FSR) can be used as a ratio to measure financial sustainability in the future.FSR is a ratio to measure the sustainability of a bank in terms of bank financial performance.This ratio is also used to determine the bank's ability to generate and increase returns to achieve and maintain its long-term existence.(Yuliawati, Jensen, & Saputri, 2020) Based on The Consultative Group to Assist the Poor (CGAP) which is a consultative group to help the poor under the auspices of the World Bank, the standard value for FSR is above 100%.The larger the FSR of a bank, the greater the ability of a bank to continue its operations, using the FSR ratio can be known information about the sustainability and growth rate of the bank in the long run.The FSR condition of Sharia Commercial Banks in Indonesia during the research period (2017-2021) can be seen in Table 1 One of the factors that affect FSR is the Capital Adequacy Ratio (CAR).According to Muhammad, CAR is a ratio that shows the bank's ability to provide funds for operational and business needs and cover the risk of losses caused by bank operations.The greater this ratio, the better the capital position will be in covering losses.With circumstances like this, the financial ability is sustainable, or (Muhammad, 2015)financial sustainability ratio can be achieved according to predetermined targets.So an increase in CAR can cause an increase in the FSR of a bank, in this case, the bank's financial performance becomes increasingly increasing.
Other factors that influence FSR include Operating Costs to Operating Income (BOPO).According to Rivai, BOPO is a ratio used to measure the level of efficiency and ability of banks in carrying out their operations.The smaller the BOPO ratio, the more efficient the operational activities carried out by the bank, because the bank concerned can cover its operational costs with the operating income obtained.This happens because when BOPO goes down, banks manage to minimize their operational costs and make bank sustainability opportunities (FSR) bigger or increase.(Rivai, 2013) Another factor affecting FSR are Net Core Operating Margin(Yusuf, 2017) (NCOM).NCOM is a ratio used to measure the ability of bank management to manage its productive assets to generate a net profit-sharing margin.This is supported by Frianto Pandia's theory, which states that the results of NCOM calculations show the ability of bank management to manage its productive assets to generate profit-sharing income.The greater NCOM shows an increase in a bank's operating income on assets under management, the higher the potential financial sustainability of the bank as measured by the financial sustainability ratio (FSR).(Pandia, 2012)

RESEARCH METHOD Research Approach
This research is a type of quantitative research with an associative approach.Quantitative research is research that demands a lot of the use of numbers, ranging from data collection, interpretation of the data, and the appearance of the results.The associative approach (correlational) is research that is related between two or more variables, whereas data analysis uses more statistical analysis depending on the form of the relationship of the research variables.Causal relationships are causal relationships, the research variables include independent variables / independent variables (influential) and dependent variables / dependent variables (influenced).(Suyoto& Sodik, 2015)(Agung & Yuesti, 2019)

Data Types and Sources
The type of data used in this study is quantitative data type.Quantitative data is data in the form of numbers or numbers, where this quantitative data can be processed and analyzed using statistical techniques.(Digdowiseiso, 2017) The data source used in this study is secondary data.Secondary data is data obtained or collected by researchers from various existing sources (researchers as secondhand), this data can be obtained through various sources such as the Central Bureau of Statistics (BPS), books, reports, journals, and others (Digdowiseiso, 2017).In this study, secondary data was obtained from annual financial statement data (Annual report) of Sharia Commercial Banks in the 2017-2021 period downloaded on the official website of each Sharia Commercial Bank, as well as data released by the Financial Services Authority in the form of Islamic banking statistics for the December 2017-2021 period obtained from www.ojk.go.id.

Population and Sample
This study uses purposive sampling as a method of sample selection.Purposive sampling that is, sample selection techniques that are adjusted to certain criteria based on research objectives.Based on these criteria, 10 samples can be drawn from 12 Sharia Commercial Banks registered with the OJK as of December 2021 to be the subject of research, namely Bank Aceh Syariah, Bank Muamalat, Bank Victoria Syariah, West Java Banten Syariah, Bank Mega Syariah, Bank Panin Dubai Syariah, Bank Syariah Bukopin, Bank BCA Syariah, Bank Tabungan Pensiunan Nasional Syariah, Bank Aladin Syariah.(Syahrum & Salim, 2012)

Data Analysis Methods
The data analysis method used is multiple linear regression analysis.Multiple linear regression analysis is an analysis used to measure the magnitude of the influence of the independent variable (independent variable) on the variable (dependent variable).Multiple linear regression consists of two or more independent variables and one dependent variable.The dependent variables used in this study are the financial sustainability ratio (FSR), and the independent variables used CAR, BOPO, and NCOM.In the multiple linear regression equation use the following formula: ( Based on Table 3 descriptive analysis test results revealed that NCOM on 10 BUS starting from 2017-2021 can be described with a total of 50 data, obtained results mean -0,3332.The highest NCOM was obtained at 14.86 in 2019 at Bank BTPN Syariah.The minimum NCOM obtained was -37.74 in 2018 at Bank Aladin Syariah.This shows that the amount of NCOM in this study sample ranges from -37.74 to 14.86, and it can be seen that there are still Sharia Commercial Banks that show a low NCOM ratio level from the limit set by Bank Indonesia of 3% so the bank's profitability is low in anticipating potential losses.Variable standard deviation Net Core Operating Margin (NCOM) of 8.24084.Based on the normality testing table using the One-Sample Kolmogorov Smirnov Test revealed that the Asymp.Sig.(2-tailed) value was 0.265.Which is the value of Asymp.Sig 0.265 > 0.05.Therefore, it can be concluded that the research data used in this study is normally distributed.The autocorrelation test table above reveals that Durbin Watson's value is 2.108.So it can be concluded that the DW value lies between dU and (4-dU) or dU < DW < 4-dU.So, the value obtained is 1.6739 < 2.108 < 2.3261.Therefore, it can be concluded that this study did not show symptoms of autocorrelation.In the multicollinearity test table above, it can be seen that the three independent variables namely CAR, BOPO, and NCOM show a VIF (Variance Inflation Factor) number of less than 10 and a tolerance value of more than 0.10.This is shown by variables Therefore, it was concluded that the regression model in this study was not exposed to the problem of multicollinearity.

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> 0.05.In the NCOM variable (X3) of 0.680 > 0.05.From these results, it can be concluded that this study is free of symptoms of heteroscedasticity and deserves to be studied.81 and Sig < 0.05 values, which are 0.000 < 0.05.So it can be concluded that in the F test Ha4 is accepted and H04 is rejected.This means that together CAR (X1), BOPO (X2), and NCOM (X3) have a significant effect on the Financial Sustainability Ratio (FSR).This happens because the three variables are interrelated and have a relationship, where if all independent variables are combined it will simultaneously affect the FSR.

Y = a + β₁X₁ +β₂X₂ +β₃X₃ + e
Riyanto & Hatmawan, 2020) Data analysis model using multiple linear regression model processed through SPSS program version 20 with the final results obtained from the research as follows:

Table 7 Heteroscedasticity Test Results
Based on table 7 above, reveals that the results of heteroscedasticity testing with the Glejser test show a Sig value of > 0.05, namely in the CAR variable (X1) of 0.692 > 0.05.In the BOPO variable (X2) of 0.791

Table 8
the test results of the t-test can be drawn, namely: 1) Test hypothesis 1 on the Capital Adequacy Ratio (CAR) variableThe calculated value of CAR (X1) < table is 1.087 < 1.67866 and the Sig value of the variable CAR (X1) > 0.05 is 0.283 > 0.05.So it can be concluded that Ha1 is rejected and H01 is accepted, meaning that CAR (X1) has a positive and insignificant effect on the Financial Sustainability Ratio (FSR).2) Test hypothesis 2 on the variables Operating Cost and Operating Income (BOPO) obtained the calculated value of BOPO (X2) > table, which is 5.687 > 1.67866, and the Sig value of the variable BOPO (X2) < 0.05, which is 0.000 < 0.05.So it is concluded that Ha2 is accepted and H02 is rejected.This means that BOPO (X2) has an effect and is significant on the Financial Sustainability Ratio (FSR).A negative t value indicates that BOPO has the opposite relationship with FSR.3) Test hypothesis 3 on Net Core Operating Margin (NCOM) variablesThe calculated value of NCOM (X3) < table is 2.432 > 1.67866 and the Sig value of the NCOM variable (X3) < 0.05 is 0.019 < 0.05.So it is concluded that Ha3 is accepted and H03 is rejected, meaning that NCOM (X3) has a positive and significant effect on the Financial Sustainability Ratio (FSR).

Table 9 F Test Results (Simultaneous Test) ANOVA
Constant), NCOM, CAR, BOPO In the table above, the test results from the F test are Fcalculate > Ftable values are 26.325> 2.