Sharia-Based Finance and Institutional Resilience in Islamic Banking: Evidence from Bank Muamalat and Its Contribution to the SDGs
DOI:
https://doi.org/10.23917/profetika.v27i02.13114Keywords:
profitability, islamic banking, ardl, third-party funds, sdgsAbstract
Objective: This study aims to analyze the determinants of short-term and long-term profitability of Bank Muamalat Indonesia for the period 2016–2024. The variables tested included total assets, liabilities, equity, third-party funds, and zakat. Theoretical framework: The research is based on the theory of Islamic banking intermediation and bank profitability combined with Islamic financial principles, such as mudharabah, wadiah, zakat, and risk-sharing. This framework describes the relationship between sharia fund management and profitability performance. Literature review: The literature shows that third-party assets, liabilities, capital, and funds are important factors that affect the profitability of Islamic banks. However, studies that integrate Islamic social aspects, such as zakat, are still relatively limited. Methods: The study used a quantitative method with the ARDL-ECM model to analyze the short-term and long-term relationships between variables. The data used covers the period 2016–2024 at Bank Muamalat Indonesia. Results: The results show that total assets have a significant positive effect on profitability, while liabilities have a significant negative effect. Equities and deposits do not have a significant long-term influence on the profitability of banks. Implications: These findings emphasize the importance of strengthening asset quality, sharia funding innovation, and regulatory reform to improve the profitability and resilience of Islamic banks. In addition, the results of the study support the contribution of Islamic banking to the achievement of the SDGs. Novelty: This study integrates sharia principles, such as zakat and risk-sharing, into profitability analysis using the ARDL-ECM approach. In addition, this study links the profitability of Islamic banks to institutional resilience and the SDGs.
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