Copyright © 2018 Authors. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. International Journal of Engineering & Technology, 7 (3.30) (2018) 587-591 International Journal of Engineering & Technology Website: www.sciencepubco.com/index.php/IJET Research paper Profit Growth in Indonesian Sharia Bank: the Impact of RGEC Chairil Akhyar 1 , Marzuki 2 , Azhar 3 , Ghazali Syamni 4 * 1,2,3 Department of Management, Universitas Malikussaleh, Lhokseumawe 4 Department of Management, Universitas Malikussaleh, Lhokseumawe and PhD scholar in Management, University of Syiah Kuala, Banda Aceh *Corresponding author E-mail: syamni_ghazali@yahoo.com Abstract The purpose of this study aims to examine the impact of RGEC implementation on the growth of Sharia Banking profit in Indonesia. This study uses data of financial statements of 11 Sharia banking Indonesia during the year 2012-2014. This research uses panel regres- sion model in testing RGEC factor on profit growth. Based on the data indicates that Sharia banking is still at risk, but GCG, ROA and CAR are still in a maintained position. Statistically this study found that NPF, CAR, inflation and Sharia banking activities affect the profitability of these banks. This indicates that Sharia banking has experienced risk and profitability problems. Economic problems inevi- tably affect Indonesian banks as it is seen that the level of profitability and inflation are not much different from each other. Keywords: Impact, RGEC, Risk, Sharia Banks 1. Introduction The world of banking today faces problems that can disrupt its growth. Baselga-Pascual (1) state that the banking business is facing economic problems, thus making the high and low bank risk. Economic problems include interest rate, high inflation rate, low national income of a country and the global economic crisis. The condition of the economic crisis also had a negative impact on bank profitability, (2). It has also spread to Sharia banking in vari- ous countries, (3). In addition to economic problems, according to Karbhari (4) Sharia banking also faces the problem of customer diversity, regulation, and competition with conventional banks and less qualified human resources. Bilal & Amin (5) mentioned that Sharia banking is also experiencing problems of efficiency and lower profitability compared with conventional banking. So, Alandejani et al.(6) and Alandejani & Asutay (7) explicitly say that Sharia banking has a high risk of failure and survival times shorter than conventional banks. On the financial side of Doumpos et al. (8) Sharia banks are finan- cially weaker than conventional banks. According to Zins and Weill (2017), it is necessary to strengthen banking stability by implementing regulations that lead to level of banks’ risk. Fur- thermore, Ibrahim & Rizvi (10) mention that the institutions or parties that take the policy (the government in this case the central bank) to focus on improving regulations relating to the health stability of banks. Regulations made by policy makers can im- prove better governance or management as mentioned by (11), Sharia banking governance is still weaker than it should be. Thus, to reinforce governance to make it stronger, (12) suggest the need for greater emphasis and enforcement of governance. Good poli- cy-making will improve the efficiency of bank performance, so that Sharia banking gets better profitability and capital improve- ment. In Indonesian’s context, to evaluate dynamics of banking devel- opment including Sharia banking has done by making regulations, both regulatory agencies and regulatory regulations. The regula- tion of Indonesian government agencies has established a Finan- cial Services Authority (OJK) institution authorized by Law Num- ber 21 of 2012. On the regulatory side, the Indonesian government through Bank Indonesia as the Central Bank has published the Circular Letter Number 3/24 / DPNP of 2011 on health Banks that come into effect since 2012. Health assessment in accordance with Circular Letter Number 3/24 / DPNP in 2011 contains four factors, namely; Risk Profile, Good Corporate Governance, Earning and Capital (RGEC). This RGEC assessment is then reinforced by the establishment of the Financial Services Authority Regulation No. 8 / POJK.03 / 2014. The presence of these regulations is expected to affect the stability and profitability of the bonds and resistance in facing the macroe- conomic and internal dynamics of banks. (13) claimed macroeco- nomic dynamics as a factor affecting the profitability of banks in Switzerland. (14) concluded ROA affects Sharia banking in Ma- laysia. (12) said the imposition of good governance mechanisms will make Sharia banking more effective and improve its profita- bility. (15) find that in Pakistan management practices governance, operating efficiencies and risk mitigation ultimately improving banking performance. While, (1) said capitalization of capital, profitability, efficiency and liquidity of banks greatly affect bank risk. In Sharia banks larger capital makes the bank unstable profit- ability (16). Research in Indonesia on RGEC has been done with various mod- els and several previous studies in have been conducted on the bank's health to profit growth finding partially inconsistent results but simultaneously affect to profit growth. (17) tested RGEC against stock price changes. (18) examines of RGEC was against profitability. But research in Sharia Banks refers to (19) but he does not include Good Corporate Governance variables. FDR and NPF is the proxies of risk profile have a positive effect on Return on Assets (20) But (21), NPL, LDR and CAR have no effect on the profit growth of national private foreign exchange banks. (22) say the NPL is influential on ROA and CAR does not affect ROA. Penelitian lain (23) stattes NPF has a positif effect ob profit