The Effect Of Green Banking, Sharia Governance And Non-Performing Financing On The Financial Performance Of Sharia Commercial Banks In Indonesia Registered With The Ojk (Financial Services Authority) In 2020-2024

Abstract

This research is motivated by the rapid development of Islamic banking in Indonesia which is accompanied by challenges in maintaining stable and sustainable financial performance. Fluctuations in profitability, the high risk of non-Performing Financing (NPF), and not optimal implementation of green banking and sharia governance are important factors that affect the performance of Islamic banks. Therefore, this study aims to analyze the influence of Green Banking, Sharia Governance, and Non-Performing Financing on the financial performance of Sharia commercial banks in Indonesia registered with the Financial Services Authority (OJK) for the period 2020-2024. The research method used is a quantitative approach with associative type of research, using secondary data in the form of financial statements and bank sustainability reports, and analyzed using multiple linear regression techniques. The results showed that partially or simultaneously, Green Banking, Sharia Governance, and Non-Performing Financing have an influence on the financial performance of Islamic commercial banks. NPF variables tend to negatively affect financial performance, while Green Banking and Sharia Governance have the potential to make a positive contribution to improving bank profitability and stability. The implications of this study affirm the importance of integrating sustainable financial practices, strengthening Sharia governance, and controlling financing risks to improve optimal and sustainable financial performance. The results of this study are expected to be a reference for regulators, banking practitioners, and academics in formulating policies and strategies for the development of Islamic banking in Indonesia