Sustainability-Driven Efficiency: Insights from Bank Central Asia Sharia’s Development

Abstract

Purpose: The growth of Islamic banks is evident from their total assets and the financing channeled to the public, but it becomes an obstacle when certain factors arise. The purpose of this paper is to analyze the relationship between. Profitability and operational efficiency in Islamic Commercial Banks in Indonesia, i.e., Bank Central Asia (BCA).Design/methodology/approach: This study employs a quantitative research design, utilizing data collected from 2021 to 2025. This study uses two variables: profitability, measured by return on assets (ROA) and return on equity (ROE), and operational efficiency, assessed by operating expenses and operating Income (BOPO)—data analysis techniques using data analysis with the help of WarpPLS 7.0 software. PLS is a variant-based structural equation (SEM) analysis.Findings: The results revealed that ROA has a negative and significant effect, while ROE has a positive and significant impact. This finding can be attributed to the profitability of Islamic commercial banks, particularly BCA Sharia, which enables them to reduce operational costs, thereby increasing operational efficiency in Islamic banking.Practical implications: BCA Sharia green finance and sustainability practices support its efficiency goals, as evidenced by high DEA efficiency scores and reduced operating costs through resource-saving and digitalization. Proper reporting and governance further enhance profitability, particularly regarding ROE and EPS. Although occasional short-term costs exist, strategic investment and monitoring will bolster long-term operating efficiency and ensure sustainable growth.Social implications: Sustainability in Islamic banking extends beyond environmental impact; it fosters deeper stakeholder trust, motivates employees, enhances governance, and aligns with Islamic social values. These factors combine to streamline operations, enhance decision-making, and improve community integration, all of which enhance operational efficiency at banks like BCA Sharia.Research limitations and implications: The current research highlights positive links to sustainability efficiency but is constrained by small sample sizes, inconsistent measures, and governance complexity. Future studies should adopt robust frameworks, longer time horizons, improved labor capacity, and enhanced Sharia governance practices to derive actionable insights for BCA Sharia.Originality/value: The research’s originality lies in its focused, empirical, and methodological exploration of how sustainability practices tangibly improve operational efficiency within BCA Sharia, anchored in Islamic performance indexes and advanced efficiency modeling. This makes it both academically novel and practically valuable.