The Effect of Bank Funding Sources on Total Revenue and Impact on Profit

Study on Joint Financial Reports of Sharia Banks and Sharia Business Units in Indonesia 2014-2020

Abstract

 In general, companies in operations use funds sourced from debt, own capital, or the
results of investment/financing from outside parties. Likewise, Islamic banks in their
operations also use these sources of funds. Selection of alternative sources of funds
used can affect the level of company profitability as measured by profit. This study
aims to determine whether there is an effect of sources of funds originating from bank
debt (liability banks), securities issued, and bank third party funds on total income
and the impact on profits of Islamic banks in Indonesia in 2014-2020. This study uses
a quantitative approach with the type of case study research by analyzing the combined financial statements of Islamic banks and Islamic business units in
Indonesia from 2014-2020 published on the websites of Bank Indonesia and the
Financial Services Authority. The data analysis technique used is Path analysis
technique with variables X1: Bank debt (bank liability), X2: Securities issued, X3:
Third party funds, Y: Profit and Z: Total Revenue. The research results show that bank
debt and third party funds have no partial effect on total income, but simultaneously
have a significant effect. Debt and securities variables have no effect on profits, while
third party funds and total income have a significant effect on profits. The variable
that has the greatest influence contribution is the total income variable.