The Effect of Capital Adequacy Ratios, Third-party Funds, and Non-performing Financing on the Liquidity of Islamic Commercial Banks in Indonesia

Liquidity is a ratio that describes a bank’s ability to provide its short-term needs. The availability of these funds is sometimes experiencing problems. One of them is the existence of problematic financing, commonly referred to as non-performing financing (NPF). Adequacy of capital and protection of all risks are things that must be fulfilled by the bank to maintain trust and provide a sense of security to the public. This capital adequacy can be measured by the Capital Adequacy Ratio (CAR). Liquidity in this study will be proxied by the Finance To Deposit ratio (FDR). The formulation of the problem in this study is: How do the third-party funds (DPK), NPF, and CAR partially affect the ratio of liquidity levels (FDR) of Islamic Commercial Banks in Indonesia? How do DPK, NPF, and CAR simultaneously affect the level of liquidity (FDR) BUS in Indonesia? This research is a quantitative study, using secondary data collection techniques for BUS financial reports for the 2017-2020 period, data analysis, multiple linear regression models, and the SPSS program. The results showed that CAR had a significant effect on liquidity with a value of 0.039 ˂ 0.05, DPK had a significant effect on liquidity with a value of 0.011 ˂ 0.05, and NPF had a significant effect on liquidity with a value of 0.006 ˂ 0.05. Collectively CAR, DPK, and NPF affect the liquidity of Islamic Commercial Banks. Keywords: capital adequacy ratio (CAR), third-party funds (DPK), non-performing financing (NPF), financing to deposit ratio (FDR)