In early 2020, the world was shocked by the outbreak of the Covid-19 virus which is a pandemic that extends to almost all countries, including Indonesia. Corona Virus Deseas 19 (Covid-19) was declared a pandemic by the World Health Organization (WHO) in early 2020. Starting from first confirmed case was reported in early March 2020. Some effort has been made in suppressing the number of cases that continue to increase, such as the implementation of Large-Scale Social Restrictions (PSBB). But every effort made certainly has risks and impacts as well as PSBB which not only has an impact on the health sector, but also all sectors, one of them is the economy.

The impact of Covid-19 emerged on all types of sectors, not only the health sector, but also other sectors, including banking. The impact of the Covid-19 pandemic on banking is on banking performance which will later affect the level of banking peformace. To learn more about the impact of Covid 19 on bank Performance, this objectivity can be achieved by comparing banks performance under normal environmental conditions, namely before being exposed to the Covid-19 pandemic.

Banking system is one of the affected beside health sector, including sharia bank. Therefore, Indonesia Bank applied mitigation risk by providing regulatory stimulus in order to maintain the stability of the banking system in the form of financing relaxation policies or lessen the credit burden. Central Bank policy is expected to be able to run effectively to contribute to encouraging the performance of shariah banking. 

Shariah bank is one of the the implication to financial sector. This moment becomes an opportunity for shariah banking and other financial institutions to contribute in helping the community economy. The evidence has been issued for Financial Services Authority (POJK) Regulation No.11/POJK.03/2020 on Credit Relaxation /Financing for communities affected by the Covid-19 pandemic.

OJKT regulation aims to maintain the stability of the financial and banking system, because the policy has an impact on banking performance [1,2]. This is in line with the results of Wahyudi [3] and (Wahyudi, Mujibatun and Riduwan [4], research which concluded that the policy contributed significantly to the performance of Shariah banking in Indonesia. Nevertheless, Omar [5], stated that in the context of Covid 19 the wave of crisis is different, which creates three major crises, namely health crises, economic crises and social crises. Hal ini sejalan dengan hasil penelitian Wahyudi [3,4].

Regarding on Shariah finance, the impact of Covid-19 pandemic attacked various Islamic financial institutions in Indonesia. In the Islamic capital market sector, the Jakarta Islamic Index (JII) was significantly affected in March 2020 when the first confirmed Covid-19 cases in Indonesia. The capital market index fell sharply by 6.44% in mid-March 2020.

Responding to economic shock sector, the Government of Indonesia is required to responsive in taking a policy quickly and appropriately with careful planning. Through the Ministry of Finance of the Republic of Indonesia, Bank Indonesia and the Financial Services Authority, the Government oversees the country's financial stability strategy. Various policies were released to save Indonesia from the monetary crisis as a pan- for the sake of Covid-19.

The government responses to the spread of coronavirus continues to develop quickly the on the economic and financial sector through strengthening the Islamic Finance Lem-baga, considering the growing financial kiner-ja of Islamic Financial Institutions. Evidently "CAR (Capital Adequacy Ratio)" from the statistics of Islamic Financial Institutions from January 2016 to January 2020 which has been published by the Financial Services Authority which has been summarized into the Figure 1.

The Capital Adequacy Ratio (CAR) is used to the level of performance of both Banks and Non-Banks contained in the annual financial statements of financial institutions. CAR is regulated in "Law No. 10 of 1998 on Banking, namely in Article 29 paragraph 2". Based on statistics above, Islamic Financial Institutions are still very healthy in their capital. This opportunity for strengthening marketing for shariah banks. Shariah bank must be careful to determine strategies in the midst of the Covid-19 pandemic. Expanding the measurable market share into the all-digital segment is a choice that is said to be quite challenging that can be taken by Islamic banks.

The impact of the Covid-19 pandemic also affected shariah banking in the country where before the pandemic, Islamic banking was able to maintain its performance stable, even in 2019, Islamic banking managed to record double digits’ growth with a market share above 5%.

The Covid-19 pandemic has greatly affected financial performance. The implications of the Covid-19 pandemic have impacted the disruption of most business activities in all sectors including banking, resulting in a slowly in global and national economic growth.

Covid-19 pandemic, Shariah banking emerged several possible risks, such as the risk of bad financing (NPF), market risk and liquidity risk. Therefore, these risks will ultimately have an impact on performance and profitability of shariah banking.

The economic crisis that occurred at this time has an impact on all aspects of people's lives. The economic crisis in 2020 caused by covid-19 also has an impact on the financial sector and especially the banking sector. Shariah Bank is still suffering crisis. Of course, this economic crisis could affect Islamic banks. Some bank indicators that can be disrupted include, Retun on Asset (ROA), non performing finance (NPF), financing to deposit ratio (FDR) and Cost to Income Ratio.

Most of the research has been conducted that investigates the performance of Islamic banks in normal times. However, there has been no specific research on the impact of the pandemic on banking performance. This study aims to analyze the influence of CAR, NPF, Cost to Income Ratio and FDR on ROA on Indonesian Islamic banking during the Covid-19 Pandemic.

Therefore, research aims to analyze the impact of Covid-19 on the financial performance of Islamic banking by analyzing financial statements using financial ratios, namely Return On Asset (ROA), Capital Adequacy Ratio (CAR), Non Performing Finance (NPF), Financing Deposit to Ratio (FDR) and Cost to Income Ratio.

Theoretical Basis

Shariah Bank: Shariah bank is a bank whose business activities are based on sharia principles and all transactions carried out must be in accordance with the rules and regulations applicable to the agreements in fiqh muamalah and in its activities do not include interest (riba). and according to its type c.onsists of:

• Islamic commercial bank

• Sharia business unit

• Islamic people's financing bank (BPRS)

Islamic banking is one part of economic activity. Bank comes from the word bangue (French) and from the word banco (Italian) which means chest/closet or bench. 

Crates/cabinets and benches describe the basic functions of commercial banks, namely: first, provide a place to deposit money safely (safe keeping function), second, provide a means of payment to buy goods and services (transaction function). According to Hasibuan is a financial institution means that a bank is a business entity whose wealth is mainly in the form of financial assets (financial assets) and is motivated by profit and also social.

Shariah bank is a bank based on the principle of partnership, justice, transparency and universal in conducting banking business activities based on sharia principles.

Figure 1: CAR of Shariah Bank

Table 1: Shariah Bank Financial Report at Bank BSI, BTPN Syariah and Bank Panin Dubai Maret 2020-Maret 2021

Table 2: Bank Performance Standard

Islamic bank activities are the implementation of Islamic economic principles with the following characteristics:

• Various forms of prohibition of riba

• Not knowing the concept of time value of money (time value of money)

• The medium of exchange is not as a commodity but as a concept of money

• It is not permissible to carry out any form of speculative activity.

• One item for one price is allowed.

• One contract for one transaction is allowed

Financial Report

Financial report is an overview of the financial state of a company in a given period. Financial statements are basically the result of an accounting process that can be outlined as a tool to communicate financial data or activities of a company with parties concerned with the data or activities of the company

Regarding to increase the transparency of financial conditions, based on Bank Indonesia Regulation No. 3/22/PBI/2001 on 13th December 2001, each bank must present financial statements as mentioned above, each bank is required to submit several other types of reports to be submitted to BI. Other reports include:

• Annual Report and Annual Financial Report

• The Annual Report is a comprehensive report detailing on a bank's performance throughout preceding year. Annual Financial Statements are bank year-end financial statements compiled based on applicable financial accounting standards and must be audited by public accountants. Annual report such as:

• Balance sheet

• Income Statement

• Cash Flow Statement

• Monthly Publication financial re

• Laporan Keuangan Publikasi Bulanan

• Consolidated Financial Report

Financial Peformance

According to Munawir states that the purpose of measuring the company's financial performance is:

• Liquidity ratio

• Rentability ratio

• Solvency ratios

• Stability

Financial Performance Analysis is the results or achievements that have been achieved by the company's management in managing its function of managing the company's assets effectively over a period of time.

Financial Ratio

Based on Letter of Bank Indonesia (SEBI) No. 9 of 2007 concerning the Health Assessment System of Commercial Banks Based on sharia principles, further regulation of the ratios used. These financial ratios are divided into main ratios, supporting ratios and observed ratios. The main ratio is a ratio that has a strong influence (high impact) on the Bank Health Level. While the supporting ratio is a ratio that directly affects the main ratio and supporting ratio.

CAR (Capital Adequacy Ratio)

CAR is the capital ratio to see the performance of banks issuing funds for business development purposes and accommodating the risk of loss of funds caused by the bank's operating activities. The greater the CAR, the better the banking performance, because the existing capital is able to close if there is a loss in credit activities and trade securities.

According to Bank Indonesia (Number 14/18/PBI/2012), the Bank is obliged to provide minimum capital according to the risk profile, so that it is not only able to absorb potential losses from credit, market and operational risks, but also other risks such as liquidity risks and other material risks. Minimum capital provision according to the risk profile is set at the lowest as follows:

• 8% of Risk Weighted Asset for Banks with a 1 rating risk profile

• 9% less than 10% of Risk Weighted Asset for Banks with a 2 rating risk profil

• 10 % less than 11% of Risk Weighted Asset for Banks with at level 3 rating risk

• 11% to 14% of Risk Weighted Asset for Banks with a 4 rating risk profile or rank 5

The determination of risk profile factors refers to Bank Indonesia's provisions regarding the assessment of the health level of commercial banks. The CAR (Capital Adequacy Ratio) calculation is formulated as follows:

ROA (Return On Assets)

According to Dewi and Prasetiono, ROA can be used to measur effectiveness of the company in proft by their utilizing the assets. Its function is to see how effective banking is in using its assets in generating income. The greater the value of ROA means that the better the ability of banking in generating profits. Formula for calculating ROA:

NPF (Non Performing Financing)

A high NPF will magnify costs, potentially bank losses. The higher this ratio, the worse the quality of bank loans that cause the number of problem loans to be greater and therefore the bank must bear losses in its operations so that it affects the decrease in profits (ROA) obtained by banks. The formula for calculating NPF is:

FDR (Financing to Deposit Ratio)

FDR is a measure of liquidity that measures the amount of funds placed in the form of loans derived from funds collected by banks (especially the public). If the measurement results are far above the target and limit, it means that it is likely that the bank will experience liquidity difficulties which in turn will cause pressure on bank income. The higher the FDR, the company's profit increases (assuming the bank is able to distribute loans effectively, so that the amount of bad loans will be small). The formula for calculating FDR is:

Cost to Income Ratio

Cost to Income Ratio related to the efficiency of management expenses which is considered to be one of the important determinants of banking profitability because it is possible for banks to increase profitability by focusing attention on proper cost control. dan efisiensi operasi. According to Bank Indonesia Circular Letter No/3/30/DPNP dated December 14, 2001, which is meant by operating income is the sum of margin income and revenue share and then minus third party funds on later results coupled with other operating income formulated as follows:

Operating Cost is costs used in activities during the bank's run that aim to assist the bank's activities and obtain income. Bank Indonesia's decision stipulates that the size of the Cost to Income Ratio ratio does not exceed 90 percent or more precisely 92 percent. The higher the Cost to Income Ratio, the negatively affect banking profitability.

This research approach uses quantitative research associative. According to Rusiadi [6], associative research is a study that aims to find out the relationship between two or more variables. 

The data in this research uses secondary data, namely Islamic Banking Statistics data published by the Financial Services Authority (OJK). The data taken is 12 months (March 2020-March 2021) when the first case of Covid-19 is announced on March 2, 2020. 

Table 3: Auto Regression Distribution Lag Result

Dependent Variable: ROA, Method: Panel Least Squares, Date: 11/03/21, Time: 11:57, Sample: 2001 2005, Periods included: 5, Cross-sections included: 3, Total panel (balanced) observations: 15

Table 4: Common Effect

Dependent Variable: ROA, Method: Panel Least Squares, Date: 11/03/21, Time: 21:35, Sample: 1 15, Periods included: 5, Cross-sections included: 3, Total panel (balanced) observations: 15

This research uses paired sample t-test. This test is used to measure how much difference the financial performance of Indonesian Islamic banking, when the announcement of the first Covid-19 case in Indonesia. The data processing in this study uses EVIEWS.

The type of data used by the author in conducting this study is secondary data used in the form of quarterly financial statements (annual reports) of Islamic banks from March 2020 to March 2021 downloaded from the website, www.ojk.co.id.

The data source used by the authors in conducting this study is secondary data. Secondary data used in the form of annual financial statements of Islamic banks from March 2020 to March 2021 is downloaded from the website, www.ojk.co.id.

Auto Regression Distribution Lag (ARDL) analysis tested the data that is combined cross section (state) data with time series (annual) data, the results of the Auto Regression Distributin Lag Panel are better than the usual panel, because it is able to integrate long-term and has a lag distribution that best fits the theory. As for the results of the ARDL Panel using Eviews 10 software, it is displayed as Table 3.

Auto Regresive Distributin Lag analysis shows that Financing Deposits Ratio and Cost to Income Ratio had a significant effect on Return On Asset in Islamic Banks in Indonesia where the probability value of independent variables was less than 0.05. While Non Performing Financing and Capital Adequency Ratio had no significant effect on ROA in Islamic Banks because the probability value of independent variables was greater than 0.05. To estimate the parameters of the model with panel data, there are three techniques (models) that will be used, namely the Common Effect Model and Fixed Effect Model but for the Random Effect Model cannot be used in this study because the number of individual banks is less than the number of coefficients or the amount of time (t) which is greater than the number of individuals (i) then in this study only use the Common Effect Model and Fixed Effect Model only.

Probability value <a yaitu which is 0.1716, it can be concluded based on chow test fixed effect model more precise than common effect model.

The Effect of Capital Adequency Ratio (CAR) on Return On Asset (ROA) of Shariah Bank

Based on from Auto Regresive Distributin Lag analysis, the probability value of Capital Adequency Ratio variables is 0.000 <0.005 so it can be said that The Capital Adequency Ratio variables have a positive and significant effect on Return On Assets in Islamic banks during the Covid-19 pandemic. If the value of Capital Adequency Ratio is high, then the bank is able to finance operational activities and contribute considerable to profitability. The results of this study are also in accordance with the hypothesis and theory that Capital Adequency Ratio has a positive and significant effect on Return on Assets.

Table 5: Fixed Effect Model

Dependent Variable: ROA, Method: Panel Least Squares, Date: 11/03/21, Time: 21:35, Sample: 1 15, Periods included: 5, Cross-sections included: 3, Total panel (balanced) observations: 15

Table 6: -F Test Fixed Effect

Redundant Fixed Effects Tests, Equation: FE, Test cross-section fixed effects, Cross-section fixed effects test equation, Dependent Variable: ROA, Method: Panel Least Squares, Date: 11/03/21, Time: 21:54, Sample: 1 15, Periods included: 5, Cross-sections included: 3, Total panel (balanced) observations: 15

This is also in line with the research of Dewa Ayu and Ida Bagus which also stated that Capital Adequency Ratio has a positive and significant effect on Return on Assets. It can be concluded that the hypothesis and results of the data processing on this study are in accordance with theory and research.

The Effect of Non Performing Finance (NPF) on Return On Asset (ROA) of Shariah Bank

Based on from Auto Regressive Distribution Lag analysis, the probability value of Non Performing Financing variable is 0.719 >0.005 so it can be said that Non Performing Financing variables do not have a significant effect on Return on Assets in Islamic banks during the Covid-19 pandemic. If a bank has high Non Performing Financing (NPF), it showing that the bank is not professional to manage the credit, as well as providing an indication that the level of risk on financing to the bank is quite high, with the high level of problematic financing will certainly reduce the profitability of a bank even if the Non Performing Financing is too high the Islamic bank can be reducing capital’s Bank. But in this study the results obtained that Non Performing Financing did not have a significant effect on Return On Assets in Islamic banks during the Covid-19 pandemic which means this research is in line with previous research conducted by Ihsan Effendi and Prawidya Hariani RS [7].

The Effect of Financing Deposits to Ratio (FDR) on Return On Asset (ROA) of Shariah Bank

Based on from Auto Regressive Distribution Lag analysis, the probability value of the Financing Deposits Ratio variable is 0.002 <0.005 so it can be said that the variable the Financing Deposits Ratio variable has a significant effect on Return on Assets in Islamic banks during Covid-19. This result is in line with the theory that the bank's FDR ratio is at the standard set by Bank Indonesia which must not exceed 110%, then the profit earned by the bank will increase (assuming the bank is able to terlalu increase in profit, the Return on Asset (ROA) will also increase, because profit is a component that makes up Return on Asset (ROA). FDR has a negative relationship with ROA, where the smaller the value of FDR then the ROA of an Shariah commercial bank should be better. This is also in line with previous research conducted by Ihsan Effendi and Prawidya Hariani RS [7].

The Effect of Cost to Income Ratio on Return On Asset (ROA) of Shariah Bank

Based on from Auto Regresive Distributin Lag analysis, the probability value of The Cost to Income Ratio variable is 0.000 <0.005. Then it can be said that The Cost Income Ratio variables have a significant effect on Return On Assets in Shariah banks during Covid-19 in Indonesia. 

According the result previous research where The cost to Income Ratio has a significant negative influence on profitability. The cost to Income Ratio are costs used in activities during the bank's run that aim to assist the bank's activities and obtain income. This is also in line with research conducted by Rofiul Wahyudi which concluded that only The cost to Income Ratio variables that have an impact on ROA during the Covid-19 Pandemic show Shariah bank performance indicators still show quality and aggressive performance.

Partial test (T Test) Result

T Test of Capital Adequency Ratio Result: Based on Table 7 shows The Capital Adequency Ratio (CAR) on ROA has a value of significant 0.011 < 0.05 then the hypothesis was Accepted.

Table 7: Coefficients Coefficientsa

a: Dependent Variable: ROA

T Test Non Peforming Financing Ratio Result

Based on Table 8 shows The Non Perfoming Financing (NPF) on ROA has a value of significant 0.006 < 0.05 then the hypothesis was Accepted.

Table 8: Coefficients Coefficients^a

a: Dependent Variable: ROA

T Test Financing Deposits Ratio Result

Based on Table 9 shows The Financing Deposits Ratio (FDR) on ROA has a value of significant 0.729 >0.05 then the hypothesis was rejected.

Table 9: Coefficients Coefficients^a

a: Dependent Variable: ROA

T Test Cost to Income Ratio Result

Table 10 shows The Cost to Income Ratio on ROA has a value of significant 0.565 > 0.05 then the hypothesis was rejected.

Table 10: Coefficients Coefficients^a

a: Dependent Variable: ROA

Conclusion Model Panel Analysis for Auto Regresive Distributin Lag (ARDL)

• The Capital Adequency Ratio (CAR) had no positive and significant effect on the Return on Asset (ROA) of Shariah banking during the Covid-19 pandemic in Indonesia

• The Non-Performing financing (NPF) had no positive and significant effect on the Return on Asset (ROA) of Shariah banking during the Covid-19 pandemic in Indonesia

• The Financing Deposits Ratio (FDR) had a positive and significant effect on the Return on Asset (ROA) of Shariah banking during the Covid-19 pandemic in Indonesia

• The Cost to Income Ratio had a positive and significant effect on the Return on Asset (ROA) of Shariah banking during the Covid-19 pandemic in Indonesia

Conclusion T Test

• The T test results are known that there is a significant influence on the variable Capital Adequency Ratio (CAR) in Shariah banking during the Covid-19 pandemic in Indonesia

• The T Test results are known that there is a significant influence of Non Performing Financing (NPF) in Shariah banking during the Covid-19 pandemic in Indonesia

• The T Test results are known to have no significant influence on the Financing Deposits Ratio (FDR) in Shariah banking during the Covid-19 pandemic in Indonesia

• The T Test results are known to have no significant effect The Cost to Income Ration in Shariah banking during the Covid-19 pandemic in Indonesia

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