THE INFLUENCE OF INTELLECTUAL CAPITAL AND SHARIA COMPLIANCE TO THE BANKING FINANCIAL PERFORMANCE IN INDONESIA. JARES

This study aims to analyze the effect of intellectual capital and Sharia Compliance on Financial Performance. This study also uses several variables that are identified as factors that affect Financial Performance including intellectual capital as measured by using Value Added Intellectual Coefficient (VAIC), and sharia compliance as measured by using Islamic Income Ratio (IsIR) proxy. The research method used is quantitative descriptive by using multiple linear regression test models. Sampling was carried out using a purposive sampling method so that 7 Islamic banks in Indonesia were obtained with 42 researched data used as research samples and hypothesis testing was performed using simultaneous significant tests (F test) and partial significant tests (t test) with ɑ = 5%. F Test results show that intellectual capital, and sharia compliance together have a significant positive effect on financial performance. T test results show that intellectual capital and Sharia Compliance have a significant positive effect on financial performance.


INTRODUCTION
Banks are business entities that collect funds from the public in the form of deposits and distribute them to the public in the form of credit and or other forms in order to improve the standard of living of the people (Law No. 10 of 1998). In Indonesia, the development of sharia-based banks is now experiencing rapid progress. This was preceded by the development of the Islamic economy in Indonesia which showed a success. It has become common knowledge that the development of Islamic economics begins with the emergence of Islamic financial institutions.
The development of Islamic banks has implications for the challenges that must be faced by Islamic banks, where the biggest challenge is to maintain the image and good name in the eyes of customers in order to maintain customer trust and loyalty to Islamic banks (Falikhatun, 2012: 2). The development of Islamic banking today is still far from expectations. If you look at the Muslim population which is the largest in the world, it does not guarantee the rapid development of Islamic banking. Even the financial performance of Islamic banks is not as long as conventional banks. It can be seen from the return on assets (ROA) of sharia banking that continues to decline. In 2012 ROA of Islamic banking still stood at 2.14%, the following year it declined and continued to decline until the peak occurred in 2014 with ROA of 0.79%. Bank failures, including Islamic banks, are currently Citation: Azzahra, K. (2020). THE  The level of financial performance of a bank can affect public confidence in the bank.
Because basically community assessment is seen from the implied measure such as facilities, services and profit levels. So as an institution that in its activities using funds from the public bank is required to maintain and improve its performance (Astutik, 2015: 3). One of the most appropriate indicators to measure a company's performance is profitability. The company's ability to generate profits can be used as a benchmark for company performance.
The higher the profitability, the better the company's financial performance. One measurement that can be used in measuring the company's financial performance is Return On Assets (ROA). If the company's profits increase or decrease, ROA will experience changes so that the measurement in research uses ROA. Performance measurements are important to assess the performance of bank management and to make plans for future performance improvement. Performance can be influenced by several variables while the variables that influence in this study are intellectual capital and sharia compliance.
Intellectual capital is an intangible asset in the form of information and knowledge resources that serves to improve competitiveness and can improve company performance and corporate value. According to the International Federation of Accountants (IFAC), there are several terms that are almost similar to intellectual capital, including intellectual property, intellectual assets, knowledge assets, all of which are intended as shares or capital based on knowledge owned by the company. While sharia compliance is a manifestation of the fulfillment of all sharia principles in financial institutions that have the form, characteristics, integrity and credibility of sharia banks. where the culture of compliance is the values, behaviors and actions that support the creation of sharia bank compliance with all Bank Indonesia regulations (Bank Indonesia Regulation Number 13/2 / PBI / 2011).
Research on Intellectual Capital is believed to play an important role in increasing company value and financial performance. (Chen, 2005), (Tan, 2007), and (Ulum, 2008) have proven that Intellectual capital (VAICTM) has a positive influence on a company's financial performance by using the Pulic model as a measure of a company's intellectual abilities. Several studies have been conducted to measure the effect of intellectual capital on financial performance, but research shows different results. The inconsistency of research sectors. In addition, from an intellectual aspect, overall employees in the banking sector are more homogeneous compared to other economic sectors (Kubo, 2002).
Based on the background that has been described, the formulation of the problems in this study are (1) whether intellectual capital influences financial performance (2) whether sharia compliance affects financial performance and (3) whether intellectual capital and sharia compliance simultaneously affect financial performance . This study aims to test empirically in analyzing the effect of intellectual and shariah compliance on financial performance both partially and simultaneously.

Intellectual Capital
Intellectual capital is an intangible asset in the form of information and knowledge resources that serve to improve competitiveness and improve company performance.
According to the International Federation of Accountants (IFAC), there are several terms that are almost similar to intellectual capital, including intellectual property, intellectual assets, knowledge assets, all of which are intended as shares or capital based on knowledge owned by the company (Widyaningrum, 2004). Pulic (1998;1999;2000) does not directly measure a company's intellectual capital, but proposes a measure to assess the efficiency of added value as a result of the company's intellectual ability (Value Added Intellectual Coefficient -3 VAIC):

Sharia Compliance
Shariah compliance is the compliance of sharia banks to sharia principles. Islamic banks are financial institutions that operate in accordance with Islamic principles, meaning that banks operate in accordance with Islamic sharia provisions, especially regarding the

FINANCIAL PERFORMANCE
Financial performance is the work performance that has been achieved by the company in a certain period and stated in the financial statements of the company concerned (Munawir, 2010). The purpose of management is to maximize the value of the company to achieve this goal, the company must take advantage of the strengths of the company and continuously improve the existing weaknesses. One way is to measure financial performance by analyzing financial statements using financial ratios (Munawir, 2010 in Mayangsari and Andayani, 2015: 60)

Research Model
The Research Model of this research is below Financial performance is a picture of the financial condition of a bank in a given period, including aspects of raising funds and channeling funds. Financial performance in this study was measured using Return on Assets (ROA).
ROA can be calculated using the following formula: ROA can be calculated using the following formula:

Intellectual Capital
Intellectual Capital is measured by the Value Added Intellectual Coefficient (VAICTM) developed by Pulic (1998). This method uses three proxy calculations, namely:

POPULATION AND SAMPLE
The population used in this study is all Islamic banking listed on the Indonesia Stock Exchange (IDX) for the period of 2013 -2018. The population is 14 and not all of these populations will be the object of research, so further sampling is needed by the purposive sample method. sampling. The following details on determining the sample can be seen in  (7) 3 Data relating to research variables are available in full (overall data available and published in the 2013-2018 period).

7
The number of samples that meet the criteria 7 Research period 6 Total sample data for the period 2013-2018 42 Source: Data processed by the author

Analysis Technique
The data analysis method in this study uses descriptive statistics and multiple regression analysis with the help of Statistical Product and Service Solution (SPSS) version 22.0

RESULTS AND DISCUSSION
Descriptive statistical analysis is used to provide a statistical description of the independent and dependent variables in the study. The variables in this study will be tested

HYPOTHESIS TEST RESULTS T TEST Tabel 3 Partial Test Results (t Test)
F RO M the results of the persial test (t test) of table 3 above, the results of this research prove as follows: Based on the partial test results (t test), it can be obtained that the tcount is 2.357 with a significant value of 0.003 with a value below 0.05 and a table of 2.01954.
This means that it can be concluded that intellectual capital has a positive and significant effect on financial performance.

The Influence of Sharia Compliance to the Financial Performance
Based on the partial test results (t test), it can be obtained the tcount of 3.243 with a significant value of 0.002 with a value below 0.05 and a table of 2.01954. This means that it can be concluded that Sharia Compliance has a positive and significant effect on financial performance.

F TEST Tabel 4 Simultaneous Test Results (Test F)
From the F test results in table 4 above, it shows that the fcount value of 5.996 with a significant level of 0.005 whose value is smaller than 0.05, so it can be concluded that the independent variable has a significant effect on the dependent variable. While fcount 5.996> Ftable 3.23 means that all independent variables simultaneously have a significant effect on the dependent variable.

The Influence of Intellectual Capital to the Financial Performance
Intellectual capital has a positive and significant effect on financial performance through the ROA proxy, this occurs because intellectual capital is intellectual property centered on human resources that functions to improve the competitiveness of human resources owned by the company, If the ability of human resources is getting better, then expected to produce good performance for the company, so that the profitability of Return On Assets is increasing. Based on resource-based theory, companies will excel in business competition and get good financial performance by owning, controlling and utilizing important strategic assets (tangible and intangible assets). Intellectual capital is believed to play an important role in increasing company value and financial performance (ROA).
These results support the research of Ulum et al (2008), and Kurniawan (2013), showing that Intellectual Capital has a positive effect on ROA. But these results are not in line with research by Rismawati and Sanjaya (2013), which states that Intellectual Capital has no significant effect on company performance (ROA).

The Influence of Sharia Compliance to the Financial Performance
Sharia compliance has a positive and significant effect on financial performance because Sharia compliance is one of the important pillars in the development of Sharia Banks, because these pillars are the difference between Sharia Banks and Conventional Banks. For this reason, Sharia Banks must maintain consistent operation of their companies with sharia principles so that customers will trust them and the level of company performance will improve. And financial performance will also increase. This study is in line with Budiman's research (2017) "The Effect of Sharia Compliance and Islamic Corporate Governance on Financial Performance of Islamic Commercial Banks" which states that Sharia Compliance which is proxied by ISiR has a positive effect on financial performance.

CONCLUSION
Based on the results of research and discussion that has been described previously, some conclusions drawn are as follows: 1. Intellectual Capital has a positive and significant effect on financial performance, if banks /companies have competent human resources, infrastructure within the company supports and has good relations with customers/relationships, it is expected to produce good financial performance for the company, so that profitability returns on assets will increase.
2. Sharia compliance has a positive and significant effect on financial performance, if Islamic banks can maintain and run their companies according to Islamic principles consistently, so that this can provide a distinction between Islamic and conventional banks and can trigger customer interest in using Islamic banking products and this can improve the financial performance of Islamic banking.