This study aims to analyze the effect of income diversification on bank performance. The independent variable in this study is income diversification, with the control variables are CAR, LDR, NPL and the dependent variable is bank performance (SHROA and SHROE). The sample used in this study is a company engaged in banking companies listed on the Indonesia Stock Exchange (IDX) for the period 2015-2019. The number of samples used in this study amounted to 30 banking companies using purposive sampling. The results of the study show that the income diversification and NPL variables have a significant negative effect on bank performance (SHROA and SHROE). The LDR variable has a significant positive effect on bank performance (SHROA and SHROE). While CAR and Bank Size variables have no significant effect on bank performance. Managerial Implications: Banking companies are expected to minimize the use of income diversification to reduce the level of risk, increase the level of credit distribution and monitor credit disbursement so as not to cause credit failures.
scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.
customersupport@researchsolutions.com
10624 S. Eastern Ave., Ste. A-614
Henderson, NV 89052, USA
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
Copyright © 2024 scite LLC. All rights reserved.
Made with 💙 for researchers
Part of the Research Solutions Family.