Liquidity and Credit Risk in Indonesian Islamic Banks
Anwar Salahuddin & Winalda Ajaniara Perdana
Faculty of Economics and Business, Universitas Islam Negeri Syarif Hidayatullah & Department of Management, Faculty of Economics and Business, Universitas Indonesia
Abstract
This research investigates the impact of credit risk and liquidity risk on Islamic bank performance in Indonesia. Some previous studies have found that credit risk and liquidity risk have a significant impact on bank performance. Using data in Indonesia from 2008 to 2016, this study finds that credit risk has negative impact on Islamic bank performance while liquidity risk have negative impact on ROA and positive impact on ROE of Islamic bank in Indonesia. This result is in line to the previous studies done in developed and developing countries.
Keywords: credit risk, liquidity risk,, Islamic bank, bank performance, Indonesia
Topic: Finance