Financial performance of islamic commercial banks: Integrating liquidity, profitability, and Maqashid al-Shariah framework
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Jun 30, 2026
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Financial Performance, Islamic Commercial Banks, Maqashid al-Shariah, Profitability
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Abstract
This study examines whether improvements in the financial performance of Islamic Commercial Banks are accompanied by progress in achieving maqashid al-shariah objectives. Previous studies have generally assessed Islamic banking performance using either conventional financial indicators or maqashid-based measures separately, with limited evidence on their relationship at the industry level. This study addresses this gap by integrating financial and maqashid performance within a single analytical framework. A descriptive quantitative approach was employed using secondary data from Islamic Banking Statistics published by the Financial Services Authority (OJK) for the period 2021–2025. Financial performance was evaluated using the Financing to Deposit Ratio (FDR) and Return on Assets (ROA), while maqashid performance was measured using the Maqashid Sharia Index (MSI). The findings indicate that FDR increased from 70.12% to 84.62% and ROA improved from 1.55% to 2.03%, reflecting stronger financial intermediation and operational efficiency. However, MSI fluctuated throughout the observation period, suggesting that financial improvement does not necessarily translate into proportional progress in maqashid achievement. Among the maqashid dimensions, Promoting Welfare showed the strongest performance, whereas Educating the Individuals and Establishing Justice remained relatively weaker. These findings highlight that financial and maqashid performance represent complementary but distinct dimensions of Islamic banking evaluation.
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How to Cite
Fahlevi, M. R., Heryanto, M. F. R., & Mahmudah, N. (2026). Financial performance of islamic commercial banks: Integrating liquidity, profitability, and Maqashid al-Shariah framework. Indonesia Accounting Research Journal, 13(4), 343–355. Retrieved from https://journals.iarn.or.id/index.php/Accounting/article/view/616
References
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Ariatin, A., Dhewanto, W., & Sudrajad, O. Y. (2022). Business Model in Islamic Business Unit: A Lesson from Islamic Boarding Schools in West Java. International Journal of Applied Business Research, 4(1).
Chen, N., & Yu, M. T. (2021). National Governance and Corporate Liquidity in Organization of Islamic Cooperation Countries: Evidence based on a Sharia-compliant Liquidity Measure. Emerging Markets Review, 47. https://doi.org/10.1016/j.ememar.2021.100800
Darmawan, D., & Qodhari, D. (2025). The Effect Of Asset And Liability Management On Stability And Profitability In Islamic Banks. IJBE (Integrated Journal of Business and Economics), 9(1). https://doi.org/10.33019/ijbe.v9i1.1005
Fahmy, E., Hosen, M. N., Warninda, T. D., Rama, A., & Aimar, Q. (2026). Measuring Contemporary Islamic Banking Sustainability: Integrating ESG and Maqashid Al-Syarī ‘ah in Indonesia. MILRev: Metro Islamic Law Review, 5(1), 351–378.
Farhan, N. H. S., Almaqtari, F. A., Hazaea, S. A., & Al-ahdal, W. M. (2023). The moderating effect of liquidity on the relationship between sustainability and firms’ specifics: Empirical evidence from indian manufacturing sector. Heliyon, 9(4). https://doi.org/10.1016/j.heliyon.2023.e15439
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Heriyati, P., Yadav, N., Bismo, A., & Madzik, P. (2024). Understanding key factors in social enterprise development in Indonesia: case study approach for an optimal social enterprise business model. Social Enterprise Journal, 20(5). https://doi.org/10.1108/SEJ-08-2023-0099
Islam, M. M., & Hasan, M. M. (2024). Islamic marketing of conventional banks: bridging managers’ and clients’ perceived gaps. Journal of Islamic Accounting and Business Research. https://doi.org/10.1108/JIABR-11-2023-0379
Jedidia, K. Ben, & Salah, I. Ben. (2022). Asymmetric Causal Linkages Between Liquidity And Profitability For Mena Islamic Banks. Journal of Islamic Monetary Economics and Finance, 8(4). https://doi.org/10.21098/jimf.v8i4.1546
Khan, A. (2025). Comparative Analysis of Islamic Commercial Laws and Modern Banking Law Trends. UCLA Journal of Islamic and Near Eastern Law, 22(1). https://doi.org/10.5070/n422165334
Kusnan, Osman, M. D. H. Bin, & Khalilurrahman. (2022). Maqashid Al Shariah in Economic Development: Theoretical Review of Muhammad Umer Chapra’s Thoughts. Millah: Journal of Religious Studies, 21(2). https://doi.org/10.20885/millah.vol21.iss2.art10
Mahyudin, W. A. tira., & Rosman, R. (2022). Performance of Islamic banks based on maqāṣid al-sharīʿah: a systematic review of current research. In Journal of Islamic Accounting and Business Research (Vol. 13, Issue 4). https://doi.org/10.1108/JIABR-10-2020-0337
Marwah, A., Sapa, N. bin, & Syatar, A. (2025). Integrating Maqashid al-Shariah into Islamic Economic Practices: A Contemporary Analytical Framework and Its Applications. El-Kahfi | Journal of Islamic Economics, 6(01).
Masrizal, Sukmana, R., Fianto, B. A., & Gultom, R. Z. (2023). Does economic freedom fosters Islamic rural banks efficiency? Evidence from Indonesia. International Journal of Productivity and Performance Management, 72(9). https://doi.org/10.1108/IJPPM-11-2021-0660
Menne, F., Surya, B., Yusuf, M., Suriani, S., Ruslan, M., & Iskandar, I. (2022). Optimizing the Financial Performance of SMEs Based on Sharia Economy: Perspective of Economic Business Sustainability and Open Innovation. Journal of Open Innovation: Technology, Market, and Complexity, 8(1). https://doi.org/10.3390/joitmc8010018
Mi’raj, D. A., & Ulev, S. (2024). A bibliometric review of Islamic economics and finance bibliometric papers: an overview of the future of Islamic economics and finance. In Qualitative Research in Financial Markets (Vol. 16, Issue 5). https://doi.org/10.1108/QRFM-03-2023-0068
Mia, M. A., Rangel, G. J., Nourani, M., & Kumar, R. (2023). Institutional factors and efficiency performance in the global microfinance industry. Benchmarking, 30(2). https://doi.org/10.1108/BIJ-06-2021-0326
Mohamed, H. E. I., & Busari, S. (2025). Maqasid al-Shariah as an Epistemological Framework for Socio-Economic Reforms. BALAGH - Journal of Islamic and Humanities Studies, 5(2). https://doi.org/10.65662/balagh.1780457
Mohammed, M. O., & Taib, F. M. (2015). Developing Islamic banking performance measures based on Maqasid al-Shari’ah framework: Cases of 24 selected banks. Journal of Islamic Monetary Economics and Finance, 1(1), 55–78.
Muchiri, M. K., Fekete-Farkas, M., & Erdei-Gally, S. K. (2025). How Do Green Banking Practices Impact Banks’ Profitability? A Meta-Analysis. In Journal of Risk and Financial Management (Vol. 18, Issue 6). https://doi.org/10.3390/jrfm18060320
Muryanto, Y. T. (2023). The urgency of sharia compliance regulations for Islamic Fintechs: a comparative study of Indonesia, Malaysia and the United Kingdom. Journal of Financial Crime, 30(5). https://doi.org/10.1108/JFC-05-2022-0099
Peraturan Otoritas Jasa Keuangan (POJK). (2014). Nomor 8/POJK.03/2014. Penilaian Tingkat Kesehatan Bank Umum Syariah dan Unit Usaha Syariah. https://ojk.go.id/id/regulasi/Pages/Penilaian-Tingkat-Kesehatan-Bank-Umum-Syariah-dan-Unit-Usaha-Syariah.aspx
Rodriguez, V. H. P., Aguilar, H. E. V., Delgado, F. M. C., Santa Cruz, L. D. C. S., Benavides, A. M. V., Salazar, C. A. H., Reategui, J. A., Escobar, B. R. P., & Suyón, A. A. (2024). Challenges in the Relationship between Liquidity and Profitability: Perspectives from a Literature Review. Revista de Gestão Social e Ambiental, 18(1), 1–17.
Sousa, F., & Almeida, L. (2025). Banking Profitability: Evolution and Research Trends. In International Journal of Financial Studies (Vol. 13, Issue 3). https://doi.org/10.3390/ijfs13030139
Suprayitno, E., & Haq, Y. S. (2022). Performance Analysis of Sharia Banking in Indonesia: Abu Zahrah Maqasid Shariah Index Approach. Afkaruna: Indonesian Interdisciplinary Journal of Islamic Studies, 18(1), 140–168.
Taufik, M., & Budiarsyah, G. G. (2025). Board characteristics and profitability in sharia-compliant and non-sharia-compliant firms: beyond mere ceremony? Asian Review of Accounting, 33(2). https://doi.org/10.1108/ARA-03-2023-0082
Vrotslavskyy, D., & Dropa, Y. (2024). The Role Of The Banking System In Providing Financial Resources For The Development Of The Economy. Grail of Science, 40. https://doi.org/10.36074/grail-of-science.07.06.2024.021
Vuong, G. T. H., Phan, P. T. T., Nguyen, C. X., Nguyen, D. M., & Duong, K. D. (2023). Liquidity creation and bank risk-taking: Evidence from a transition market. Heliyon, 9(9). https://doi.org/10.1016/j.heliyon.2023.e19141
Wijayanti, U., & Suprayitno, E. (2025). Unraveling the Performance of Islamic Banking: An Analysis of Determinant Factors of Islamic Commercial Banks’ Financing 2018 ̶ 2023. Journal of Islamic Economic Laws, 8(02). https://doi.org/10.23917/jisel.v8i02.10388
Wu, X., Jin, T., Yang, K., & Qi, H. (2023). The impact of bank FinTech on commercial banks’ risk-taking in China. International Review of Financial Analysis, 90. https://doi.org/10.1016/j.irfa.2023.102944
Yu, J., & Lin, C.-T. (2026). Bank Green Bond Issuance and Liquidity Creation: Evidence from Chinese Banks. International Review of Economics & Finance, 104959.
Yudaruddin, R. (2023). Financial technology and performance in Islamic and conventional banks. Journal of Islamic Accounting and Business Research, 14(1). https://doi.org/10.1108/JIABR-03-2022-0070
Zailani, M. N., Satar, N. H. M., & Zakaria, R. H. (2022). Maqasid Al-Shariah based index of socio-economic development: A literature review. The Journal of Muamalat and Islamic Finance Research, 47–62.
Ahsanul Amal, M., Gunawan, D., Choiri, M., & Badrus Zaman, A. R. (2024). The Impact of Maqashid Syariah on the Human Development Index (HDI): The Case of Indonesia. Journal of Islamic Economic Laws, 7(02). https://doi.org/10.23917/jisel.v7i02.6127
Alam, M. K., & Miah, M. S. (2024). Do Islamic banks use institutional theory in the light of Shariah governance? Empirical evidence from a Muslim dominant country. Heliyon, 10(2). https://doi.org/10.1016/j.heliyon.2024.e24252
Alshater, M. M., Saba, I., Supriani, I., & Rabbani, M. R. (2022). Fintech in islamic finance literature: A review. In Heliyon (Vol. 8, Issue 9). https://doi.org/10.1016/j.heliyon.2022.e10385
Analia, A. L., Hakim, A., Anto, M. B. H., & Perdana, A. R. A. (2024). Implementing maqasid sharia: Impact on stability of Indonesian Islamic banks. Jurnal Ekonomi & Keuangan Islam, 164–176.
Ariatin, A., Dhewanto, W., & Sudrajad, O. Y. (2022). Business Model in Islamic Business Unit: A Lesson from Islamic Boarding Schools in West Java. International Journal of Applied Business Research, 4(1).
Chen, N., & Yu, M. T. (2021). National Governance and Corporate Liquidity in Organization of Islamic Cooperation Countries: Evidence based on a Sharia-compliant Liquidity Measure. Emerging Markets Review, 47. https://doi.org/10.1016/j.ememar.2021.100800
Darmawan, D., & Qodhari, D. (2025). The Effect Of Asset And Liability Management On Stability And Profitability In Islamic Banks. IJBE (Integrated Journal of Business and Economics), 9(1). https://doi.org/10.33019/ijbe.v9i1.1005
Fahmy, E., Hosen, M. N., Warninda, T. D., Rama, A., & Aimar, Q. (2026). Measuring Contemporary Islamic Banking Sustainability: Integrating ESG and Maqashid Al-Syarī ‘ah in Indonesia. MILRev: Metro Islamic Law Review, 5(1), 351–378.
Farhan, N. H. S., Almaqtari, F. A., Hazaea, S. A., & Al-ahdal, W. M. (2023). The moderating effect of liquidity on the relationship between sustainability and firms’ specifics: Empirical evidence from indian manufacturing sector. Heliyon, 9(4). https://doi.org/10.1016/j.heliyon.2023.e15439
Financial Services Authority. (2025). Sharia Banking Statistics, June 2025. https://data.ojk.go.id/SJKPublic/
Hassan, M. K., İslam, M. T., Ahmed, Z., & Sarker, J. I. (2023). Islamic banking in Bangladesh: a literature review and future research agenda. International Journal of Islamic and Middle Eastern Finance and Management, 16(5). https://doi.org/10.1108/IMEFM-05-2022-0185
Heriyati, P., Yadav, N., Bismo, A., & Madzik, P. (2024). Understanding key factors in social enterprise development in Indonesia: case study approach for an optimal social enterprise business model. Social Enterprise Journal, 20(5). https://doi.org/10.1108/SEJ-08-2023-0099
Islam, M. M., & Hasan, M. M. (2024). Islamic marketing of conventional banks: bridging managers’ and clients’ perceived gaps. Journal of Islamic Accounting and Business Research. https://doi.org/10.1108/JIABR-11-2023-0379
Jedidia, K. Ben, & Salah, I. Ben. (2022). Asymmetric Causal Linkages Between Liquidity And Profitability For Mena Islamic Banks. Journal of Islamic Monetary Economics and Finance, 8(4). https://doi.org/10.21098/jimf.v8i4.1546
Khan, A. (2025). Comparative Analysis of Islamic Commercial Laws and Modern Banking Law Trends. UCLA Journal of Islamic and Near Eastern Law, 22(1). https://doi.org/10.5070/n422165334
Kusnan, Osman, M. D. H. Bin, & Khalilurrahman. (2022). Maqashid Al Shariah in Economic Development: Theoretical Review of Muhammad Umer Chapra’s Thoughts. Millah: Journal of Religious Studies, 21(2). https://doi.org/10.20885/millah.vol21.iss2.art10
Mahyudin, W. A. tira., & Rosman, R. (2022). Performance of Islamic banks based on maqāṣid al-sharīʿah: a systematic review of current research. In Journal of Islamic Accounting and Business Research (Vol. 13, Issue 4). https://doi.org/10.1108/JIABR-10-2020-0337
Marwah, A., Sapa, N. bin, & Syatar, A. (2025). Integrating Maqashid al-Shariah into Islamic Economic Practices: A Contemporary Analytical Framework and Its Applications. El-Kahfi | Journal of Islamic Economics, 6(01).
Masrizal, Sukmana, R., Fianto, B. A., & Gultom, R. Z. (2023). Does economic freedom fosters Islamic rural banks efficiency? Evidence from Indonesia. International Journal of Productivity and Performance Management, 72(9). https://doi.org/10.1108/IJPPM-11-2021-0660
Menne, F., Surya, B., Yusuf, M., Suriani, S., Ruslan, M., & Iskandar, I. (2022). Optimizing the Financial Performance of SMEs Based on Sharia Economy: Perspective of Economic Business Sustainability and Open Innovation. Journal of Open Innovation: Technology, Market, and Complexity, 8(1). https://doi.org/10.3390/joitmc8010018
Mi’raj, D. A., & Ulev, S. (2024). A bibliometric review of Islamic economics and finance bibliometric papers: an overview of the future of Islamic economics and finance. In Qualitative Research in Financial Markets (Vol. 16, Issue 5). https://doi.org/10.1108/QRFM-03-2023-0068
Mia, M. A., Rangel, G. J., Nourani, M., & Kumar, R. (2023). Institutional factors and efficiency performance in the global microfinance industry. Benchmarking, 30(2). https://doi.org/10.1108/BIJ-06-2021-0326
Mohamed, H. E. I., & Busari, S. (2025). Maqasid al-Shariah as an Epistemological Framework for Socio-Economic Reforms. BALAGH - Journal of Islamic and Humanities Studies, 5(2). https://doi.org/10.65662/balagh.1780457
Mohammed, M. O., & Taib, F. M. (2015). Developing Islamic banking performance measures based on Maqasid al-Shari’ah framework: Cases of 24 selected banks. Journal of Islamic Monetary Economics and Finance, 1(1), 55–78.
Muchiri, M. K., Fekete-Farkas, M., & Erdei-Gally, S. K. (2025). How Do Green Banking Practices Impact Banks’ Profitability? A Meta-Analysis. In Journal of Risk and Financial Management (Vol. 18, Issue 6). https://doi.org/10.3390/jrfm18060320
Muryanto, Y. T. (2023). The urgency of sharia compliance regulations for Islamic Fintechs: a comparative study of Indonesia, Malaysia and the United Kingdom. Journal of Financial Crime, 30(5). https://doi.org/10.1108/JFC-05-2022-0099
Peraturan Otoritas Jasa Keuangan (POJK). (2014). Nomor 8/POJK.03/2014. Penilaian Tingkat Kesehatan Bank Umum Syariah dan Unit Usaha Syariah. https://ojk.go.id/id/regulasi/Pages/Penilaian-Tingkat-Kesehatan-Bank-Umum-Syariah-dan-Unit-Usaha-Syariah.aspx
Rodriguez, V. H. P., Aguilar, H. E. V., Delgado, F. M. C., Santa Cruz, L. D. C. S., Benavides, A. M. V., Salazar, C. A. H., Reategui, J. A., Escobar, B. R. P., & Suyón, A. A. (2024). Challenges in the Relationship between Liquidity and Profitability: Perspectives from a Literature Review. Revista de Gestão Social e Ambiental, 18(1), 1–17.
Sousa, F., & Almeida, L. (2025). Banking Profitability: Evolution and Research Trends. In International Journal of Financial Studies (Vol. 13, Issue 3). https://doi.org/10.3390/ijfs13030139
Suprayitno, E., & Haq, Y. S. (2022). Performance Analysis of Sharia Banking in Indonesia: Abu Zahrah Maqasid Shariah Index Approach. Afkaruna: Indonesian Interdisciplinary Journal of Islamic Studies, 18(1), 140–168.
Taufik, M., & Budiarsyah, G. G. (2025). Board characteristics and profitability in sharia-compliant and non-sharia-compliant firms: beyond mere ceremony? Asian Review of Accounting, 33(2). https://doi.org/10.1108/ARA-03-2023-0082
Vrotslavskyy, D., & Dropa, Y. (2024). The Role Of The Banking System In Providing Financial Resources For The Development Of The Economy. Grail of Science, 40. https://doi.org/10.36074/grail-of-science.07.06.2024.021
Vuong, G. T. H., Phan, P. T. T., Nguyen, C. X., Nguyen, D. M., & Duong, K. D. (2023). Liquidity creation and bank risk-taking: Evidence from a transition market. Heliyon, 9(9). https://doi.org/10.1016/j.heliyon.2023.e19141
Wijayanti, U., & Suprayitno, E. (2025). Unraveling the Performance of Islamic Banking: An Analysis of Determinant Factors of Islamic Commercial Banks’ Financing 2018 ̶ 2023. Journal of Islamic Economic Laws, 8(02). https://doi.org/10.23917/jisel.v8i02.10388
Wu, X., Jin, T., Yang, K., & Qi, H. (2023). The impact of bank FinTech on commercial banks’ risk-taking in China. International Review of Financial Analysis, 90. https://doi.org/10.1016/j.irfa.2023.102944
Yu, J., & Lin, C.-T. (2026). Bank Green Bond Issuance and Liquidity Creation: Evidence from Chinese Banks. International Review of Economics & Finance, 104959.
Yudaruddin, R. (2023). Financial technology and performance in Islamic and conventional banks. Journal of Islamic Accounting and Business Research, 14(1). https://doi.org/10.1108/JIABR-03-2022-0070
Zailani, M. N., Satar, N. H. M., & Zakaria, R. H. (2022). Maqasid Al-Shariah based index of socio-economic development: A literature review. The Journal of Muamalat and Islamic Finance Research, 47–62.
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