Macro Variable Effect Analysis and Non- Performing Financing (NPF) Against the Return on Asset (ROA) Islamic Banks in Indonesia Year 2008- 2017

Islamic Banks is a business entity that raises and distributes funds from the community and for the community. The study was conducted to analyze the macro variables and NPF (NonPerforming Finance) to ROA (Return on Assets) to determine the relationship between short-term and long-term between variables. The analysis model used is the Engle Granger ECM Stage Two test that uses secondary data from the serial data (time series). The results of this study indicate that NPF simultaneously, GDP, and interest rates affect the ROA. Partially GDP positive and significant effects in the long term and short term, NPF positive and significant effect in the long term, interest rate, and no significant positive effect on ROA.


INTRODUCTION
Banking stability is essential for the prevailing economic situation of a country. At the time of the 1997 economic crisis and the 2008 global economic crisis, which negatively impacts the stability of the financial system, this confirms the stability of the banking affects the state of the economy. (Dimas, 2018) Today, the Islamic Banks are banks that operate profitoriented, then in its operations fixed for profit or gain. Rate to performance of a bank can be done by analyzing the financial statements of the bank, particularly the ratio calculation in order to evaluate the financial situation in the past, present, and future. The ability of a company to generate profits or earnings usually referred to profitability, where Islamic Banks must demonstrate its ability to generate profits obtained through customer deposit and fundraising.
In each study, the preparation of the development of statistical data that contains information about the real condition of profitability in Islamic Banks is needed to determine the development Return on Assets (ROA) of Islamic Banks, the development of an increasing or decreasing the current quarter in each year is different (Nenda, 2016). This definition describes the goals that will be investigated is the company's profit and use the Return on Assets (ROA) Islamic Banks in Indonesia in 2008 -2017. The following is a table Return on Assets (ROA) Islamic Banks in 2008 -2017. Non-Performing Financing (NPF) or often referred to as non-performing loans, can be defined as the ratio to determine problems financing borne by the bank based on the total finance portfolio in order to measure the level of financing issues faced by the bank (Rahman, Asaduzzaman, & Hossin, 2017). The higher this ratio, indicating the quality of bank financing to get worse. Here are presented in Table NPF development   In Table 1.2, it can be seen that the average -average NPF relief the second quarter of 2016 is as high as 5.68%, while the lowest NPF in 2008 to 2017 occurred in the fourth quarter of 2012 is relatively low at 2.22%. More detail is the highest first quarter in 2015 is 5.49%, and the lowest in 2012 amounted to 2.75%, the highest. Quarterly II in 2016 is 5.68%, and the lowest in 2013 amounted to 2.64%. Quarterly highest III in 2009 is 5.72%, and the lowest in 2012 amounted to 2.74%. Quarterly highest IV in 2015 is 4.84%, and the lowest in 2012 amounted to 2.22%.
In the context of the macroeconomy, the widespread use of a variety of products and financial instruments sharia addition to support the financial and business community also reduces the transactions that are speculative thus supporting the overall financial stability, which in time will provide a significant contribution to the achievement of price stability mid-term up with the long-term (Syachfuddin, 2017).
Macro variables that will be tested its effect on Return on Assets (ROA) Islamic Banks are the BI rate, and the Gross Domestic Product (GDP).
This study aimed to determine the effect of macro variables on Return On Assets (ROA), and Net Performing Financing (NPF) on Return On Assets (ROA) of Islamic banks, as well as determine the relationship Short Term and Long Term through cointegration among the variables of writing, This paper is expected to have benefits as a reference for future writing as well as fill material for the institutions involved in policy-making related to the influence of macro variables and Net Performing Financing (NPF) on the Return on Assets (ROA) Islamic Banks.

LITERATURE REVIEW Understanding Islamic Banks
Islamic banks are part of islamic banking, by-law no. 21, 2008, article 1, paragraph 1 states "islamic banking is everything related to the islamic banks and islamic business unit, covering institutional, business activities, as well as the manner and process of carrying out its business activities." (Undang-Undang, 2008).
Special definition Islamic Bank under the Law 21, 2008, article 1, paragraph 7 that "Islamic Banks and by type consisting of Islamic Banks and Sharia Bank Financing People." Meanwhile, Sharia Bank principles stated in Law No. 21, 2008, article 1, paragraph 12 "Sharia is Islamic law principles in banking activities based on a fatwa proposed by the agency that has the authority in setting the fatwa in the field of sharia." Islamic Banking has a different goal with conventional banking, where Islamic Banking objectives contained in Law No. 21, 2008, article 3, namely, "Islamic Banking aims to support the implementation of national development in order to improve the fairness of togetherness, and equalization of the people Welfare services." Islamic Banking functions outlined in Law No. 21, 2008, article 4, among others, shall perform the functions of collecting and distributing public funds, running a social function in the form of institutions treasury, which receives funds from the charity, donation, charity, hibah or other social funds and channel them to the organization of zakat, collect social funds derived from endowments money and distribute it to the management of waqf (nazir) something with the will of the giver waqf (wakif), and the implementation of social functions referred to paragraphs 2 and 3 correct with the provisions of the legislation.

Profitability ratios
Profitability shows the company's ability to generate income for a particular year. In the world of banking, income can be obtained from lending. Each lending to customers, the customer must repay the loan following the agreement between the customer and the bank.
The higher the loans be greater oversight of the loans so that no non-performing loans, due to non-performing loans will lead to a decrease in revenue for banks, due to customers are not able to repay the loan that had been loaned.

The Benefits of Profitability
Profitability has benefits that are very important and can be used as an analysis of the ability to generate profits shown to detect the cause of the profit or loss generated by object information in the accounting year, describing criteria indispensable in assessing the success of a company data terms of capability and motivation of management. Profitability is a tool to make the company profit forecast because it describes the correlation between income and the amount of capital invested.
ROA is the ratio used to determine the ability of the bank's management in the overall profit and the bank rate, which is better than the other bank profitability ratios. The greater the ROA in getting, the greater the profits obtained and the better position of the bank in terms of asset utilization. The evaluation criteria for the soundness ratios Return on Assets (ROA) can be seen in Table  3 as follows:

Definition of Net Performing Financing (NPF)
The ratio is used to determine the financing problems incurred by the bank based on the total financing disbursed (Indah, 2016). Based on Bank Indonesia regulation through Bank Indonesia Circular Letter No. 9/29 / DBPs dated December 2007. NPF can be calculated using the formula:

Net Interest Performing Financing (NPF)
To measure the level of financing problems faced by the bank. The higher this ratio, indicating the quality of financing of Islamic banks, is getting worse. In Table 2.1 explains the criteria for the rating of the NPF ratio.

Gross Domestic Product (GDP)
Gross Domestic Product (GDP) is one important indicator to determine the economic development in a country in a given year, both based on current prices and based on constant prices (Cupian, 2016). GDP is the amount of added value generated by all business units in a particular country in a given year. The total value of final goods and services provided from production must be the same as the value of the goods used.
Keynes's theory states that saving in a country is influenced by the amount of income received by society rather than influenced by the interest rate.
Economic growth is the development of activities in the economy that causes the goods and services produced in society to increase as well. The data used to measure a country's economic growth is to calculate real national income or GDP (Gross Domestic Product) according to constant prices (prices that apply in the base year) that are applied from year to year (Rehmat, 2012).
Increased income of the community resulted in increased consumption and savings of the community so that when there is economic growth marked by an increase in people's income, banking profitability can increase because of the savings that encourage banks to increase the allocation of funds through credit.

Definition of Interest Rates
The BI interest rate is the interest rate policy of Bank Indonesia, which is a reference for interest rates on the money market. Changes in BI interest rates are followed by changes in deposit rates and lending rates with directional (positive) movement. Interest rates are divided into two types, as follows: 1. The nominal interest rate (also known as usury) is the interest rate on money in terms of money.

Previous Research
Setiawati (2016) analyzed the "Macro Variable Effect on Profitability Islamic Bank." This study aimed to analyze the influence of macro variables on the profitability of Islamic banks in Indonesia during the period 2004 -2014, the method used in this research is time series by using multiple linear regression analysis models. The results showed that inflation and currency exchange rates did not affect the profitability of Islamic banks, the gross domestic product (GDP) significantly with positive direction towards the profitability of Islamic banks, and interest rates have a significant effect in the negative direction towards the profitability of Islamic banks. Kuncoro (2018) analyzed the "Impact of Macroeconomy an indicator of the profitability of Islamic Banking in Indonesia during the period 2013-2017". This study aims to determine the effect of variable inflation, BI, Capital Adequacy (CAR) and the Gross Domestic Product on the profitability of Islamic banks in the premises the period 2013-2017 demonstrated through the Return On Asset (ROA), the method of selecting the sample used is the convention sampling, Model analysis using panel data regression analysis. The results showed that the variables of inflation, interest rates BI, CAR, GDP together affect ROA. In the partial test variable inflation and CAR does not influence ROA. Interest rates and GDP have a significant influence in the opposite direction.

METHODS
The method used in this research is using quantitative research methods. As for the model analysis in this study using dynamic linear regression analysis. Data processing equipment used in the research is computer software in Eviews8 with Stage Two analytical models ECM Engle Granger. The relationship has a functional relationship with the following formula: Long-term equation model: Where, ECT : Resid01 (-1) ᵧ1 : Α1; ᵧ2 = α2; ᵧ3 = α3, short-term coefficients y0 : λβo y4 :λ; adjustment coefficient

Results Estimates
The estimation results Error Correction Model (ECM) above are presented in table 5   Table 5 Regression coefficients based ECT ((Resid01 (-1)) qualify ECT coefficient should be negative (-) of -0.426307. This coefficient or probability p-value (significance) empirical t statistics coefficient of 0.0028, which means a significant ECT onα= (0.05). This shows that the model is a model tersetimasiTwo

Interpretation of Independent Variables Influence
Based on Table 6, it can be seen that the independent variables have a significant effect in the long term is the NPF (Net Performing Finance) and GDP (Gross Domestic Product). In contrast, the independent variables that have a short-term effect are the GDP (Gross Domestic Product).
Variable NPF (Net Performing Finance) has a coefficient regression of 0.0009. The pattern of the relationship between the independent variables NPF (Net Performing Finance) and variable dependent ROA (Return on Assets) is a linear-linear then when the NPF (Net Performing Finance) rose one percent, the ROA (Return on Assets) will rise -0.279377 percent. Conversely, if the NPF (Net Performing Finance) fell one percent, the ROA (Return on Assets) will go down -0.279377.
Variable GDP (Gross Domestic Product) in the longterm model regression coefficient of 0.0011, the pattern of the relationship between variable, independent GDP (Gross Domestic Product) and variable dependent ROA (Return on Assets) is a linear-linear then when and variable dependent ROA (Return On Assets ) is a linear-linear then when the GDP (Gross Domestic Product) rose one billion then ROA (return on assets) will rise -0.0000011 percent. Conversely, if the GDP (Gross Domestic Product) fell one billion, then ROA (Return on Assets) will go down -0.0000011.
Variable GDP (Gross Domestic Product) in the model of short-term regression coefficient of 0.0300, the pattern of the relationship between the independent variables GDP (Gross Domestic Product) and ROA (Return on Assets) is a linear-linear then when the GDP (Gross Domestic Product) rose one billion the ROA (Return on Assets) will rise -0.0000014 percent. Conversely, if the GDP (Gross Domestic Product) fell one billion, then ROA (Return on Assets) will go down -0.0000014.

Economic Interpretation
The data in this study describes the effect of long-term model and a model of short-term macro variables such as GDP, interest rate (R) and non-performing Finance (NPF) on Return On Assets (ROA) Islamic Banks in Indonesia, where the long-term model independent variables Non-Performing Finance (NPF) and the independent variables GDP effect on Return on Assets (ROA). Meanwhile, in the short-term model of independent variables that influence. Variable GDP-a significant independent variable on the dependent variable can be intrepeted as follows:

Gross Domestic Product (GDP) and Return on Assets (ROA)
Based on estimates of data, gross domestic product, and a significant positive effect on Return On Assets (ROA) Islamic Banks in Indonesia. Gross Domestic Product in the model of longterm and short-term model has a negative effect, but significant on Return On Assets (ROA). Gross Domestic Product is aimed to determine the development of economic growth in a country in a given period. The economic development of a country as well should influence banking profitability in the country, the growing economy of a country may indicate that people in a state of peace with incomes afford their tubes for investment and productivity using funds from the Bank. The results are consistent with research conducted by research Setiawati (2016) in which the gross domestic product (GDP) significantly with positive direction towards the profitability of Islamic banks. The results are also consistent with studies Kuncoro (2018) GDP has a significant influence in the opposite direction. rate on return on assets (ROA) and internal variables ie nonperforming financing (NPF) on return on assets (ROA). Together or simultaneous external variables and internal variables affect the return on asset (ROA) it can be interpreted that external variables and internal variables in the short term and long term effect on the return on assets (ROA), partial variable interest rates have a significant effect in the short term and long term, a significant effect dalamjangak npf variable short and insignificant in the long term and gdp variables have a significant effect in both the short and long term.