The Impact of Market Risk and Credit Risk on the Profitability of Islamic Bank: A Case Study on Panin Dubai Syariah 2014 to 2021

Ridwan Ridwan; Yuliana Kadir; Mohammad Muzwir Luntajo; Frida Magda Sumual

doi:10.30984/kunuz.v3i2.776

Ridwan Ridwan State Islamic Institute of Manado (IAIN)
Yuliana Kadir State Islamic Institute of Manado (IAIN)
Mohammad Muzwir Luntajo State Islamic Institute of Manado (IAIN)
Frida Magda Sumual Manado State University

DOI: https://doi.org/10.30984/kunuz.v3i2.776

Keywords: Credit Risk, Profitability, Market Risk

Abstract

Market risk and credit risk play a central role in destabilizing company stability. Market risk manifests when the value of investments declines due to a decrease in market value, while credit risk arises when funds allocated by the bank to customers are not repaid according to the loan agreement. This study aims to explore the impact of market risk and credit risk on financial performance, applying an Associative-based Quantitative Method. The data used are quarterly secondary data from Bank Panin Dubai Syariah from 2014 to 2021. The sampling technique used is saturation sampling, given the relatively small population, with a total sample of 32. The analytical tests involve Descriptive Statistical Analysis, Classical Assumption Tests, Multiple Regression Analysis, T-Test, F-Test, and Determination Coefficients. The research findings show that, partially, Market Risk (NOM) has a significant influence on Financial Performance (ROA), while Credit Risk (NPF) does not have a significant impact on Financial Performance (ROA). However, simultaneously, both Market Risk (NOM) and Credit Risk (NPF) significantly influence Financial Performance (ROA)