THE MAQASHID-PROFITABILITY SYNERGY: DRIVING SUSTAINABLE ECONOMIC DEVELOPMENT THROUGH ISLAMIC BANKING PERFORMANCE (2018-2024)

Abstrak

This study investigates the synergy between Maqashid al-Shariah objectives and conventional profitability to evaluate how Islamic banking performance contributes to sustainable economic development. It examines whether banks’ adherence to maqashid principles (operationalized through the Maqashid Syariah Index (MSI)) and financial profitability (measured by Return on Assets (ROA)) influence profit growth in Indonesian Islamic commercial banks. Using secondary financial data from eight banks over the 2018–2021 period, the MSI was constructed following the Mohammed–Dzuljastri–Taib framework (Sekaran–SAW procedure) consisting of ten ratio elements representing the dimensions of education, justice, and public welfare. Multiple linear regression (SPSS v.26) tested the individual and combined effects of MSI and ROA on profit growth. The results indicate that MSI does not have a statistically significant impact on profit growth, and ROA also does not significantly predict profit growth; jointly, both variables fail to explain variations in profit growth. These findings suggest that during the pandemic period (COVID-19), maqashid-oriented performance and short-term profitability were not perfectly aligned. However, the analysis underscores that long-term synergy between maqashid fulfillment and profitability remains crucial for sustaining Islamic banking resilience and enhancing its role in driving sustainable economic development. The study contributes empirically to the growing literature on maqashid-based performance measurement and provides policy implications for achieving both ethical and economic objectives within Islamic financial institutions.