Determination of Bankometer and RGEC Models to Predict Financial Distress on Sharia Banks in Indonesia

Abstract

Banking is a collection of several functions of the Bank, which is a financial institution that has financial assets as its wealth and has profit motives and social. Banking institutions also do not rule out the possibility of experiencing financial distress; financial distress is declining phases that happen before liquidation. This research aimed to analyze the Bankometer, and RGEC Model can be used to predict financial distress on Sharia Banks in Indonesia. This research is a quantitative study using 110 financial report data and using logistic regression for analyzing the data. The results show that the Bankometer Model can be used to predict financial distress and RGEC model can be used are the variable NPL, GCG, ROA, and CAR. This research implies that it can be used by Sharia banking determining policies for an early warning before the bankruptcy of a company to avoid liquidation.

Influence of Bank Health Level Using RGEC on Financial Distress of Banks in Indonesia

“…This is because if a bank has sufficient liquidity and capital and efficient expense management, it can be said that ROA has no effect on financial distress (Limbong et al, 2022). The results of this study are in accordance with the research of Africa (2019), Nisak (2021), dan Sriyanto & Agustina (2020) which state that ROA has no effect on financial distress. While different results are shown in the research of Diwanti & Purwanto(2020), Labita & Yudowati (2020), Prianti &Musdholifah (2018), andSuhartanto et al, (2022) which show that ROA affects financial distress.…”

“…The results of this study support the research of Harahap (2016), Kuncoro &Agustina (2017), andWidiyanto &Dwijayanti (2022) which state that NPL/NPF has no effect on the financial distress of banking companies. While studies that do not support the results of this study are Africa(2019), Suotet al (2020, and Yuliani & Haryati(2022) which state that NPL affects the financial distress of banking companies.…”

Assessment of the Health Level of Rural Banks (BPR) in Buleleng Regency during the Covid-19 Pandemic

“…Bank Indonesia has established rules regarding bank health so that banks are expected to always be in good health, so as not to harm the public with an interest in banking. A healthy bank is a bank that is free from financial difficulties (Africa, 2020). An unhealthy bank not only endangers the banking sector but also interested stakeholders , namely owners/investors, bank management, bank creditors, bank debtors, the public, the Indonesian Central Bank and the Financial Services Authority as supervisors (Fangidae & Zacharias, 2021) .…”