Islamic Banks in Indonesia Boost Profitability by Managing Capital and Liquidity
The study looked at how Capital Adequacy Ratio (CAR) and Liquidity affect the profitability of Islamic banks in Indonesia from 2016 to 2020. The researchers used data analysis to show that both CAR and Liquidity have an impact on profitability. Specifically, CAR has a positive effect, while Liquidity does not directly affect profitability. Overall, 41% of profitability can be explained by CAR and Liquidity, with other factors accounting for the remaining 58%.