Efficiency, Financing Quality, and Capital Ratios of Indonesian Islamic Banks: An Exploratory 2025 Baseline

Abstract

This study maps the profitability, operational efficiency, and capital resilience of Indonesian Islamic Commercial Banks (Bank Umum Syariah, BUS) for the 2025 financial year, and positions the industry ahead of the Basel III-style liquidity regime introduced through OJK Regulations No. 20 and No. 21 of 2025. A descriptive-quantitative cross-sectional design is applied to 12 BUS using secondary data from 2025 annual reports and published financial statements. The variables examined are total assets, capital adequacy ratio (CAR), return on assets (ROA), return on equity (ROE), operating expenses to operating income (BOPO), financing to deposit ratio (FDR), and gross and net non-performing financing (NPF). The analysis combines descriptive statistics, Pearson and Spearman correlations, and sensitivity tests that exclude structurally atypical banks. All sampled banks hold CAR well above the regulatory minimum (mean 30.56%), yet profitability dispersion is wide (ROA 0.05%-7.15%; BOPO 69.08%-113.23%). The inverse association between BOPO and profitability is strong and stable across every specification (Pearson r = -0.695; Spearman rho = -0.916), as is the positive association between gross NPF and BOPO (r = 0.782). By contrast, the CAR-ROA association that appears significant in the full sample (r = 0.721) collapses once a single outlying bank is removed (r = 0.328; p = 0.325) and is therefore judged not robust. Asset size shows no significant association with profitability. Operational efficiency and financing quality, rather than capital levels or scale, are the principal differentiators of BUS performance in 2025