Abstract:
The main object of this study is to investigate the internal factors that influence the profitability
between conventional banks and Islamic banks in Indonesia over the quarterly period 2011-2016.
The study involved all five conventional commercial banks and five Islamic commercial banks by
using secondary data from Financial Services Authority of Indonesia (OJK). The test was adopted
to examine ROA (Return On Asset) as the dependent variable and CAR (Capital Adequacy Ratio),
LDR/FDR (Loan to Deposit Ratio/Financing to Deposit Ratio), NPL/NPF (Non-Performing
Loan/Non-Performing Financing) as the independent variables. The result of multiple linear
regression analysis indicated there was a positive significant impact of CAR and LDR on ROA in
conventional bank. Meanwhile for Islamic banks found that NPF was significant but negatively
impact on ROA. On the other hand, CAR and FDR had no significant effect on ROA of Islamic
banks. Further the study revealed the significant different of each variables between conventional
banks and Islamic banks in Indonesia.
