Bank Performance and Its Underlying Factors: A Study of Rural Banks in Indonesia

Chou, Te-Kuang; Buchdadi, Agung Dharmawan

doi:10.5430/afr.v5n3p55

Cited by 27 publications

(36 citation statements)

References 26 publications

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“…However, the market-value based performance does not provide a positive impact on the EC. This finding implied that the banks in Indonesia have more attention on the accounting-based performance as it will be evaluated by the central bank annually every year (Chou and Buchdadi, 2016).…”

Section: Resultsmentioning

confidence: 99%

“…The return on assets (ROA) is an accounting-based measures performance, while the Tobin's Q is market value-based measures performance. Furthermore, this study also uses non-performing loan (NPL) as the proxy of bank efficiency following the result of the recent studies that the NPL is playing an important role on the banking industry in Indonesia (Arafat et al, 2013;Chou and Buchdadi, 2016).…”

Section: Literature Review and Hypotheses Developmentmentioning

confidence: 99%

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Executive’s compensation, good corporate governance, ownership structure, and firm performance: a study of listed banks in Indonesia

Chou¹,

Buchdadi²

2018

JBRMR

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This study aims to examine the relationship between executive's compensation and firm performance in the banking industry in Indonesia. This study also determines the impact of remuneration and nomination committee (RNC) on executive's compensation (EC) and firm performance. The samples are listed bank in Indonesia during 2006-2015. The regression uses two stage least square (2SLS) with unbalanced panel data. The findings reveal that performance on pay and pay on performance are valid in Indonesia. However, the performance is only for accounting-based performance but not for market value-based performance. Furthermore, in examining the role of remuneration and nomination committee (RNC), the findings reveal that the RNC has a negative relationship to the executives' compensation (ES). It seems the role of the RNC is preventing the overpaid of the EC. Finally, regarding the ownership structure, The state banks have the similar behavior with the main findings in this research. However, only in the state bank, the RNC has a real impact on both accounting-based performance and market value-based performance. While ownership concentration (BO) variable which is used as dependent variables in this study reveals the possibility of the agency problems or inactive block holders condition that make ineffective monitoring role of the corporation since the findings show that the more BO, the more EC, and the worse firms performance.

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Section: Resultsmentioning

confidence: 99%

Section: Literature Review and Hypotheses Developmentmentioning

confidence: 99%

Executive’s compensation, good corporate governance, ownership structure, and firm performance: a study of listed banks in Indonesia

Chou¹,

Buchdadi²

2018

JBRMR

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“…In addition, this study will also cite the recent research of bank performance in Indonesia which were conducted by Arafat et al (2013) as well as Chou and Buchdadi (2016). We will use the determinant of bank performance in Indonesia as the control variables.…”

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

“…a ratio between operational expense and operational revenue. (Chou & Buchdadi, 2016) Asset (LNAsset) The natural log of firms' total assets (Tao & Hutchinson, 2013) ISSN 1923-4007 E-ISSN 1923 …”

Section: Definition Of Variablesmentioning

confidence: 99%

Independent Board, Audit Committee, Risk Committee, the Meeting Attendance level and Its Impact on the Performance: A Study of Listed Banks in Indonesia

Chou¹,

Buchdadi²

2017

IJBA

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This study determines the effect of good corporate governance on the performance of banks in Indonesia. The variables used are independent board (IB), the annual board meeting (BM), the percentage of annual board of director meeting attendance, the annual board-executive meeting (BEM), the percentage of annual board-executive meeting attendance, audit committee (AC), audit committee meeting (ACM), the percentage of annual audit committee meeting attendance, risk committee (RC), risk committee meeting (RCM), and the percentage of annual risk committee meeting attendance. The analysis technique employed in this study is two-stage least square (2SLS) panel data regression using return on asset (ROA), net interest margin ratio (NIM), and Tobin's Q as the proxies of bank performance. The data used are listed bank in Indonesia Capital Market between 2013 and 2015. The findings reveal that the independent board has a positive impact on net interest margin among the big scale bank. However, among the small scale bank the independent board of directors has the positive impact on the market value, but they will have the lack of information that could obstruct the accounting based profit of the bank. Moreover, the findings of this study also explain the important role of meeting attendance for the accounting based profitability of the bank. This study also found the critical role of the audit committee in the banking industry.

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“…Hingga akhir Januari 2017 diketahui ada sekitar 166 BPRS yang melaksanakan kegiatan operasionalnya di Indonesia (Otoritas Jasa Keuangan (OJK), 2017). Sejumlah penelitian mengenai kinerja keuangan kelompok bank ini menunjukkan bahwa sebagian besar dari mereka memiliki kinerja keuangan yang tidak efisien (Chou & Buchdadi, 2016;Muhari & Hosen, 2014;Naufal & Firdaus, 2017;Handayani, 2013).…”

Section: Pendahuluanunclassified

The Assessment of Bankruptcy Potential of Sharia Rural Banks in Indonesia

Pratiwi

Puspita

Wahyudi

2019

JECO

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Abstract:This investigation is intended to assess the possibility of financial problems in Sharia Rural Banks (SBRs) in Indonesia. The financial ratio approach is chosen to measure the financial distress potential of SRBs which assesses the profitability, liquidity, efficiency and capital adequacy of 166 banks from 2013 to 2016. The model of panel estimation uses discriminant analysis is utilized in predicting financial distress in Indonesian SRBs. The outcomes of this research are, firstly, liquidity and efficiency are the most prominent variables in predicting financial difficulties in SRBs. The second is in further analysis of liquidity shows that most SRBs are very aggressive in disbursing credit to small and medium enterprises (SMEs), which are riskier than other economic sectors. In addition, a deeper analysis of bank efficiency indicates that the highest expense component of SRBs' other operating costs is employee and administration costs. Keywords: financial distress, financial ratios, Sharia rural banks, discriminant analysisPengujian Potensi Kebangkrutan Grup Bank Pembiayaan Rakyat Syariah di IndonesiaAbstrakStudi ini bertujuan untuk menilai kemungkinan terjadinya masalah keuangan pada Bank Perkreditan Rakyat Syariah (BPRS) di Indonesia. Pendekatan rasio keuangan dilakukan untuk mengukur kemungkinan terjadinya financial distress yang menilai dari sisi profitabilitas, likuiditas, efisiensi dan kecukupan modal dari 166 bank selama 2013 hingga 2016. Model estimasi panel menggunakan analisis diskriminan diterapkan dalam memprediksi financial distress pada BPRS Indonesia. Hasilnya adalah, pertama, likuiditas dan efisiensi adalah variabel yang paling signifikan dalam memprediksi kesulitan keuangan di BPRS. Kedua, dalam analisis likuiditas lebih lanjut menunjukkan bahwa sebagian besar BPRS cukup agresif dalam mendistribusikan pembiayaan kepada usaha kecil dan menengah (UKM), yang lebih berisiko di bandingkan sektor ekonomi lainnya. Selain itu, analisis yang lebih dalam tentang efisiensi bank menunjukkan bahwa komponen biaya tertinggi dari biaya operasional lain BPRS secara rata-rata adalah biaya pegawai atau karyawan dan administrasi. Kata kunci: financial distress, rasio keuangan, BPRS, analisis diskriminan

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Bank Performance and Its Underlying Factors: A Study of Rural Banks in Indonesia

Cited by 27 publications

References 26 publications

Executive’s compensation, good corporate governance, ownership structure, and firm performance: a study of listed banks in Indonesia

Executive’s compensation, good corporate governance, ownership structure, and firm performance: a study of listed banks in Indonesia

Independent Board, Audit Committee, Risk Committee, the Meeting Attendance level and Its Impact on the Performance: A Study of Listed Banks in Indonesia

The Assessment of Bankruptcy Potential of Sharia Rural Banks in Indonesia

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