Determinants of Bank Profitability in Indonesia Based on Commercial Bank Business Activities (Buku)

Abstract

This study aims to determine the determinants of the profitability of banks in Indonesia based on the Commercial Group Business Banks (BUKU). Descriptive and verification methods used on secondary form bank that go public in Indonesian Stock Exchange. The dependent variable is Return on Assets (ROA) and the independent variables are Capital Adequacy Ratio (CAR), Loan to Deposit Ratio (LDR), Operational Expense of Operating Income (OEOI) and Net Interest Margin (NIM). The results showed that in BUKU 2, OEOI has a significant negative effect on ROA while CAR and LDR have a negative and insignificant effect on ROA and NIM has a positive and insignificant effect on ROA. In BUKU 3, it showed that CAR has a significant positive effect on ROA, for LDR and NIM has a positive and insignificant effect on ROA while for OEOI it has a negative and insignificant effect on ROA. In BUKU 4, CAR, LDR and ROA have negative and insignificant effect on ROA and NIM have a significant positive effect on ROA. Simultaneously, CAR, LDR, OEOI and NIM have an effect on ROA for Bank BUKU 2,3 and 4.

Impact of Financial Ratios, Operational Efficiency, and Non-Performing Loans on the Profitability of Nepalese Commercial Banks

“…It indicates that net interest margin has a positive impact on return on equity. This finding is similar to the findings of Marlina (2022). Similarly, the beta coefficients for capital adequacy ratio are negative with return on equity.…”

“…Le et al (2022) found that net interest margin had a positive and significant effect on profitability. Similarly, Marlina (2022) concluded that NIM has a positive and insignificant effect on ROA. Likewise, Sukmadewi (2020) stated that net interest margin variables had a positive and significant effect on Return on Assets (ROA).…”

Determinan Return on Asset Pada Bank Bumn

“…Perbankan merupakan sektor industri dalam bidang jasa keuangan yang menguasai setidaknya 80% aset industri jasa keuangan di Indonesia (Marlina, 2022). Sebagai negara yang berkembang, Indonesia tidak dapat lepas dari peran bank dalam meningkatkan pertumbuhan ekonomi (Fauziah & Fadhilah, 2021).…”

“…Berdasarkan penelitian sebelumnya yang dilakukan oleh (Azmy et al, 2019), (Wiranthie & Putranto, 2020), dan (Nasution, 2021) ditemukan bahwa ROA dipengaruhi oleh LDR. Namun, berbanding terbalik dengan hasil penelitian (Marlina, 2022) yang menemukan bahwa ROA tidak dipengaruhi oleh LDR.…”

“…Hasil penelitian menunjukkan jika bank ingin meningkatkan labanya melalui ROA, maka perlu memperhatikan faktor kecukupan modal yang diproksikan menggunakan variabel CAR dan efisiensi likuiditas yang diproksikan oleh variabel LDR karena saat bank memiliki modal yang besar maka penyaluran kredit akan meningkat sehingga keuntungan bank yang diperoleh dari pendapatan bunga pun akan meningkat. Hasil tersebut berbanding lurus dengan penelitian (Marlina, 2022) dan (Azmy et al, 2019) yang menemukan jika ROA dipengaruhi CAR dan LDR.…”