RISK AND FINANCIAL HEALTH LEVEL OF SHARIABANKING

Abstract

The purpose of this research is to analyze financial risk and financial health level of sharia banking in Indonesia. This is done to obtain empirical evidence about the possible relationship and influence of financial risk, Non Performing Financing and operational risk (ATMR for operational risk) and bank financial health (Net Operating margin, Return on Asset and Return on Equity) Banks, inflation and Gross Domestic Product as a control variable in sharia banking in Indonesia. This study used panel data analysis and used 9 Islamic banks withinfive years in a period, from 2012 to 2016, so the sample used in this study were 45 data. Data is processed by using Eviews software version 9 and Microsoft Excel. The results showed that simultaneously financial risk did not have significant effect onNOM, but had significant effect on ROA and ROE. Partially, NPF variables had only significantly influence on NOM, FDR and NPF variable had significant effect on ROA, while FDR variable had significant effect on ROE. The control variable used in this study did not affect the existing level of financial health.