Determinants of Islamic Social Reporting in Islamic Commercial Banks: The Effects of Profitability, Financing-to-Deposit Ratio, and Leverage, 2020–2024

Sandy Septiano Winas; Any Eliza; Weny Rosilawati

doi:10.36908/isbank.v12i1.1983

Authors

Sandy Septiano Winas Faculty of Islamic Economics and Business, Raden Intan State Islamic University Lampung
Any Eliza Faculty of Islamic Economics and Business, Raden Intan State Islamic University Lampung
Weny Rosilawati Faculty of Islamic Economics and Business, Raden Intan State Islamic University Lampung

DOI: https://doi.org/10.36908/isbank.v12i1.1983

Keywords:

Islamic Social Reporting (ISR), Profitability, Financing-to-Deposit Ratio (FDR), Leverage, Islamic Commercial Banks, Islamic Banking

Abstract

The growth of Sharia commercial banks (BUS) in Indonesia has heightened the importance of transparent social responsibility disclosure aligned with Islamic principles through Islamic Social Reporting (ISR). However, the relationship between banks' financial characteristics and ISR disclosure remains inconclusive. This study aims to analyze the relationship of profitability, the Financing-to-Deposit Ratio (FDR), and leverage with ISR disclosure among BUS in Indonesia during the 2020–2024 period. A quantitative approach with an associative-explanatory design was employed. The sample was selected using purposive sampling, resulting in seven BUS or 35 bank-year observations. Secondary data were obtained from annual reports, sustainability reports, and financial statements, then analyzed using multiple linear regression via IBM SPSS Statistics 26. Profitability was measured using Return on Assets (ROA), financing intermediation using FDR, and leverage using the Debt-to-Equity Ratio (DER), while ISR was measured using an index of 48 disclosure items. The results indicate that ROA and DER do not have a significant relationship with ISR disclosure, whereas FDR shows a significant negative relationship. Simultaneously, ROA, FDR, and DER are significantly related to ISR (F = 4.388; p = 0.011), explaining 29.8% of the variation in ISR disclosure. These findings demonstrate that financial characteristics collectively play a role in ISR disclosure among BUS in Indonesia.

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