HEINFLUENCE OF GOOD CORPORATE GOVERNANCEIMPLEMENTATION TO THE FINANCINGQUALITY,EFFICIENCY AND PROFITABILITY OF SYARIAH BANK IN INDONESIA(INFLATION AS MODERATING VARIABLE)

Abstract

The research back ground was provided by the gapin between performance and good governance Syariah Bankin Indonesia. Since the year 2010, whether Good Corporate Governance (GCG) has applied, the profitability,the efficiency and the financing quality even decreased.Purpose-The purpose of this research is to find out howGCG implementation is influencing the profitabilty, efficiency and financing quality of Syariah Bank. Andwhether the inflation is influencing the relationship between GCG and performance of Syariah Bank.Design/methodology/approach–The study was conducted Using Quantitative Associative Causal researchmethods with the Ordinary Least Square (OLS) as Estimator.The object of this research is the performancereport and GCG report represented by BRI Syariah, Bank Mandiri Syariah andBNI Syariah.Findings-There isa significant relationship between good corporate governance (GCG) Islamic Bank with financing quality andlevel of profitability of Islamic Bank. 28.3% of Bank Syariah financing quality is affected by the implementationof GCG; 5.2% profit Islamic Bank influenced by GCG implementation. however GCG does not affect theefficiency of Islamic Bank (BOPO). Inflation strengthen relationships between GCG with the NPF, and made anegative effect. Inflation also made GCG had weakrelationship affect to ROE. Inflation does not strengthen orweaken the effect of the implementation of GCG against BOPO.Conclusion-although the implementation of thesyariah system have not applied perfectly, but GCG have affected to performance and financing quality ofSyariah Bank in Indonesia.

Keywords:Good Corporate Governance, Inflation, Profitability, Efficiency, and Financing Quality.