Indonesia Conference Directory

The purpose of this study aims to determine the effect of third party funds and murabahah financing on profitability of Islamic Banking in Indonesia. This study applied a quantitative research. The population in this study is Islamic Banking registered in Central Bank of Indonesia (BI) during 2011-2017, while the sample is eight islamic banking chosen purposively considering the particular criteria. The data were gathered from Central Bank of Indonesia (BI) and Financial Services Authority (OJK). Furthermore, the data were analyzed using multiple linear regression analysis. The findings showed that third party funds and murabahah financing have a positive effect on islamic banking profitability in Indonesia. From the anaysis, it also can be known that third party funds and murabahah financing contribute 28.9 percent to bank profitability.