FINANCIAL PERFORMANCE OF ISLAMIC COMMERCIAL BANKS BEFORE AND DURING THE COVID-19 PANDEMIC IN INDONESIA

Financial Performance of ….. Abstract The covid-19 pandemic has dropped the economy of the world. Islamic banks as part of the economy are also affected by this pandemic. The study aims to provide an overview of the performance of Islamic Commercial Banks (BUS) in Indonesia before and during the Covid-19 pandemic. The measurement of financial performance will use several financial ratios, namely ROA, CAR, NPF, FDR, BOPO, and NOM. The research sample is all BUS in Indonesia. The years 2018 and 2019 will be used as the period before the Covid-19 pandemic, while 2020 and 2021 will be used as the period during the Covid-19 pandemic. It uses a quantitative method with measurement tools: independent sample t-test and multiple linear regression. The results of the independent sample t-test are the CAR, FDR, and BOPO variables have differences in the period before the pandemic and during the pandemic. While the ROA, NPF, and NOM variables have no difference in the period before and during the pandemic. From the partial multiple linear regression test (t-test), financial ratios in the form of BOPO and NOM influence ROA. While the variables CAR, FDR, and NPF do not affect ROA. On the other hand, simultaneously the variables CAR, NPF, FDR, BOPO, and NOM affect ROA. The research results from this article can be used as a source of information by stakeholders in making policies for a better BUS future.


INTRODUCTION
The bank is an important institution in the economy. The bank becomes an institution that acts as a bridge to distribute funds from parties who have excess funds to those who lack funds. In today's economic system there are two types of banks, namely Islamic banks and conventional banks. The two entities continue to grow and compete with each other.
It is said that Islamic banking sectors have seen no disruption to their growth over the past decade (Islamic Development Bank Group, 2020). Based on data from ISBD, total Islamic banking assets reached 1.754 billion dollars. The statement was supported by the State of the Global Islamic Economy Report 2019/2020 by the Thomson Reuters Dinar Standard published by Salaam Gateway which stated that the amount of Islamic financial assets of $ 2.52 trillion is 70% or $ 1.76 trillion is an asset in Islamic banks. The remaining 30% consists of 19% sukuk, 4% Islamic funds and 7% are others. By 2020, Islamic financial assets will rise to 12.9% to $2.88 trillion. 70% of these financial assets are Islamic banking assets globally (Dinar Standard, 2019).
The development of Islamic banks in the country is also experiencing a good trend.
Diagram 1 presents data on the development of total assets from 2018-2021.  Table 1.  (Afkar & Fauziyah, 2021). This of course causes every financial and non-profit institution continue to try to survive in the current economic conditions. When viewed from bank financial institutions whose main activities mostly distribute funds through credit or financing, of course, it poses a danger of losses due to the customer's inability to pay his obligations to pay off his loan. Meanwhile, profit-oriented business entities must maintain their continuity through profits earned.
The same thing was also expressed by (Sutrisno et al., 2020) that the Covid-19 outbreak is increasingly impacting banks because the more companies are affected, production is reduced and even in bankruptcy, which makes the distribution of banking financing more difficult. The decrease in the financing, it will further reduce the profitability of Islamic banks, including a decrease in the overall performance of banks. (Ichsan et al., 2021) said that the Islamic bank's policy applies delays in financing payments for some customers who experience a decrease in revenue for their business. The policy can certainly have an impact on the financial performance of Islamic banking. The studies about Covid-19 has also been revealed in various past studies such as (Desky & Mukhtasar, 2021), (Iskandar et al., 2021), (Rabbani et al., 2021) and (Daru et al., 2021).
Some researchers have previously taken the performance measurements research. (Majeed & Zainab, 2021) said that the growth of Islamic banking has stirred debate among policymakers and economists about the sustainability and performance of Islamic banks. (Yusuf & Ichsan, 2020)  Financial Performance of ….. 553 CAR as independent variables whose results simultaneously affect ROA. While partially CAR, NPF has an insignificant and positive effect on ROA, BOPO has a significant and negative effect on ROA and FDR has an insignificant and positive effect on ROA. (Fitriyah et al., 2021) conducted research to measure the performance of Islamic banking during the Covid-19 pandemic using CAMEL measurements reflected by financial ratios in the form of CAR, NPF, NOM, ROA and FDR. In the study, the financial performance of Islamic banks was still considered stable. It can be seen from the increase in financial ratios such as CAR and ROA. (Pradesyah & Putri, 2021), (Sugiharto et al., 2021), (Afandi, 2021) and (Fakhri & Darmawan, 2021) also use financial ratios in measuring the performance of Islamic banks.
Based on the background that has been disclosed, the study will also conduct research to measure the performance of Islamic Commercial Banks in Indonesia. It became new and different because of the data update used as a sample. Besides that, the study also providing the impact of Covid-19 through comparative study between the performance of Islamic Commercial Banks before and during the pandemic. At first, the study tried to compare the value of chosen financial ratio quarter by quarter. After that, the analysis continued by using regression and comparative test to obtain the deeper result. The results of this study will enrich previously conducted research. So, the research will be able to be a consideration for stakeholders especially for management of BUS to take the best policy for facing the Covid-19 pandemic.

REVIEW OF LITERATURE
The research conducted by (Grassa et al., 2022)  The comparative study conducted by (Fakhri & Darmawan, 2021) proved that in Indonesia, Islamic banking is more vulnerable than conventional banking in facing financial crises such as Covid-19 crises. That result in line with research of Hasan 2020, compared to conventional banks, Islamic banking is more flexible in meeting the economic crisis caused by the Covid-19 pandemic. (Candera et al., 2021) found that there was no difference in the financial performance of Islamic banking on risk profile, earning, and capital indicators before and during the Covid-19 pandemic. This analysis shows that the performance of Islamic finance is still able to deal with the impact of the Covid-19 pandemic in Indonesia. (Masood & Ashraf, 2012) with the subject research of the Islamic banks around the world, found that that assets size has positive and significant impact on the profitability of Islamic banks. The positive impact report that banks of larger assets obtain the higher profitability. The capital adequacy, loans to assets and assets management results leads to positive and significant relationship with profitability of Islamic banks proxied by return on assets (ROA). (Alharbi, 2008) conducted research on countries of the members of the Organization of Islamic Cooperation (OIC). This study indicates that equity, other operating income, GDP per capita, bank size, concentration, and oil prices affected Islamic banks'profitability positively. Insurance schemes, foreign ownership, and real GDP growth affected Islamic banks' profitability negatively. (Majeed & Zainab, 2021) said that the growth of Islamic banking has stirred debate among policymakers and economists about the sustainability and performance of Islamic banks. (Yusuf & Ichsan, 2020) researched to measure the performance of Islamic banking using financial ratio variables namely ROA as dependent variables while NPF, FDR, BOPO, and CAR as independent variables whose results simultaneously affect ROA. While partially CAR, NPF has an insignificant and positive effect on ROA, BOPO has a significant and negative effect on ROA and FDR has an insignificant and positive effect on ROA.

RESEARCH METHOD
The study used quantitative descriptive methods by testing differences to obtain a comparison of results. In addition, this study also conducted causal testing. To obtain Return on Assets (ROA) is the part of the ratio that measures a company's level of profitability. This ratio is used to measure how much net income will be generated from each rupiah of funds embedded in total assets. The greater the ROA, the greater the level of profit achieved by the company and the better the position of the company in terms of the use of assets (Wijaya, 2019  Net Operating Margin (NOM) demonstrates BUS's ability to generate profits. If the value of the NOM ratio is low then the bank's rentability rate is also low which means that the profits generated by the bank are low (Suryanto & Susanti, 2020  behavior cannot be separated from the BUS. This is because BUS is a commercial institution that must be able to survive in market competition. BUS is not a mosque or philanthropic institution that is entirely social. There are employees who must be paid and there are investors who must be satisfied. Therefore, attention to profitability is also an important thing for BUS of course without ruling out sharia values that must also be upheld.

Figure 3 Value CAR of BUS in Indonesia 2018-2021
Source: OJK, data processed by the author    Financial Performance of ….. 561

Shapiro-Wilk Normality Test
Shapiro-Wilk normality test is a normality test with a small sample. This test can be used on < 50 samples. In this test, sample data was said to be normal distribution when Sig.
values > 0,05 (Raharjo, 2021b). Table 3 shows the results of the data sample normality test scores in this study. In the Sig. column, it can be seen that the entire value < 0,05 then the data used as a sample in this study is a normal distribution.

Independent Sample t-Test
This test is a statistical analysis that aims to compare two unpaired samples. (Raharjo, 2021   interpreted that the sample data used is free from autocorrelation problems. The last classic assumption test is the multicollinearity test. Table 6 shows the results of the multicollinearity test of sample data. In the table, it can be seen that the VIF column produces a value of < 10.00 and the value in the tolerance column > 0.10. So based on these results it can be interpreted that the sample data is free from multicollinearity problems.   . In the study, BOPO's regression test results also showed negative and significant influences on ROA. The higher the cost of the bank's income means that its operational activities are increasingly inefficient, so the revenue is also small. Therefore, the smaller the BOPO ratio, the better the performance of the bank. The last variable -NOM, has a positive influence on ROA. The Sig. value 0,002 < 0,05 which shows significant results. The effect of Net Operating Margin (NOM) on Return on Assets (ROA) due to the higher value of NOM, the higher value of ROA, which means it will increase revenue sharing on productive assets managed by Islamic commercial banks so that financial performance is increasing. And if the value of NOM is getting bigger, the bank will achieve a greater operational income of managed assets. It causes banks' problems will be smaller (Gibran, 2022).  (Yusuf & Ichsan, 2020) which states that NPF, FDR, BOPO and CAR together influence ROA. Table 8 shows the result of F test in this study. Meanwhile, the remaining 2.6% is affected by other variables.

Research Implications
Based on the results of the research above, the analysis of the financial ratio values of each quarter can be used to read the situation at Islamic Commercial Banks. The ability to read the condition of Islamic Commercial Banks can be used as a basis for formulating strategies in dealing with the Covid-19 pandemic. Then, the ROA, NPF and NOM variables have differences between before and after the pandemic. Therefore, Islamic Commercial Banks need to pay more attention to the three financial ratios. How does the difference occur, whether it goes in a good or bad condition. ROA and NOM certainly need to be maintained so that they continue to increase, but NPF must be maintained in low percentage. In addition, the results of the regression indicate that Islamic Commercial Banks must be able to maintain the efficiency of bank operational activities. BUS is expected to be able to reduce the percentage of the BOPO ratio but continue to increase the percentage of the NOM ratio. Therefore, the funds that provide benefits to the BUS must continue to be distributed. For example, Islamic Commercial Banks can distribute the financing to innovative micro and small businesses during a pandemic. Businesses that are able to keep up with the needs of the pandemic are like businessman who can take advantage of technology. It is hoped that through these efforts a win-win solution can arise for both parties. BUS get benefits from the distribution of financing and businessman get additional capital.