State-owned Islamic banks merging was expected to increase financing and efficiency, leading to higher profits. The study analyzed data from three banks over 2015-2019. Results showed that financing and operating costs affect return on assets directly, but not through net operating margin. Operating expenses negatively impact return on assets. Net operating margin does not mediate the effect of financing on return on assets, but does mediate the effect of operating expenses on return on assets. The study suggests including more variables in future research for a more comprehensive analysis.