Effect Of Gross Domestic Product, Liquidity, Size, Growth, Capital Adequacy Ratio, And Inflation On Financial Performance

Purwohandoko, Purwohandoko; Iriani, Sri Setyo

doi:10.30742/equilibrium.v17i1.1423

Cited by 10 publications

(12 citation statements)

References 4 publications

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“…If a country's economic conditions are stable, private consumption is also stable. This means that income levels are rising, so banks have a higher level of liquidity (Purwohandoko & Iriani, 2021).…”

Section: Literature Reviewmentioning

confidence: 99%

The Impact of Macroeconomic Factors on Banks’ Liquidity from 2008 to 2020

Qehaja

Gashi

Hoti

2022

IJAEFA

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Liquidity is fundamental to the well-being of financial institutions, particularly banks. It determines the growth and development of banks as it ensures the proper functioning of financial markets. This research aims to examine the impact of macroeconomic variables (GDP per capita, inflation rate, and unemployment rate) on banking liquidity in the 28 European Union member countries, Turkey, and Switzerland from 2008 to 2020. The study relied on secondary data from the databases of international organizations, including the World Bank and Eurostat, to compile its sample of 390 observations. Since the research spans numerous states over 13 years, panel data are used, which are estimated using a simple linear regression model using the least squares method. According to the regression findings, GDP per capita and the unemployment rate positively affect bank liquidity, whereas the inflation rate has a negative effect on bank liquidity. Also, the regression analysis did not find any statistically significant impact of GDP per capita and unemployment rate on bank liquidity. This study shows that the inflation rate is a statistically significant macroeconomic variable that affects banking liquidity.

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Section: Literature Reviewmentioning

confidence: 99%

The Impact of Macroeconomic Factors on Banks’ Liquidity from 2008 to 2020

Qehaja

Gashi

Hoti

2022

IJAEFA

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“…The acquisition of NIM, which is increasing, will provide a positive value for return on assets for banks in Indonesia before and during COVID-19 pandemic. This statement is supported by research conducted by Purwohandoko and Iriani (2021) and Elbadry (2018) stated that net interest margin can affect the return on assets.…”

Section: Introductionmentioning

confidence: 75%

The Effect of Financial Performance on Return on Assets in Banks Before and During the Covid-19 Pandemic in Indonesia

Suharyanto,

Iskandar,

Zaki

et al. 2024

JAM

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The COVID-19 case began in Indonesia in 2020. This condition continues to spread throughout Indonesia and causes all companies not to run optimally. It can affect the company's performance, making it less than optimal. One of them is a service company such as a bank company that must carry out its operational activities in a limited manner, causing credit to the community to run less optimally. The decline in bank performance has an impact on the decline in profits earned by bank companies. The purpose of this study is to examine the financial performance of banks from 2018 to 2019, which was before the covid 19 pandemic. This study also examines the financial performance of banks during the covid 19 pandemic from 2020 to 2021 and provides several alternatives to create better banking performance in Indonesia. This study uses secondary data from audited bank annual reports from 2018 to 2021, accessed on the website www.idx.co.id. The analysis used in this study is multiple regression analysis to assess bank performance using several financial ratios, namely capital adequacy ratio, net interest margin, and loan deposit ratio to return on assets. The findings of this study show that the capital adequacy ratio, net interest margin, and loan deposit ratio have a significant positive effect on return on assets at commercial banks in Indonesia with the phenomenon before and during the COVID-19 pandemic. It proves that the capital adequacy ratio, net interest margin, and loan deposit ratio have a positive influence on company performance. Increasing financial ratios in banks can create banking conditions that are more effective and can attract investors to invest in bank companies.

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“…GDP is the monetary value of all finished goods and services made within a country during a specific period. It is an important factor that will determine the level of the economy of a country with aggregate consumer spending on goods and services (Purwohandoko, 2021). Akahtar (2023) found insignificant and negative effects of real gross domestic product on bank profitability.…”

Section: Gross Domestic Product Growth Rate (Gdpgr)mentioning

confidence: 99%

Impact of Credit Risk and Macroeconomic Variables on the Profitability of Commercial Banks in Nepal

Niraula,

Maharjan

2024

The Batuk

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This study was conducted to examine the impact of credit risk and macroeconomic variables on the profitability of commercial banks in Nepal. Return on assets and earnings per share of the banks were taken as regrassands. Whereas, as regressors, non-performing loan, capital adequacy ratio and credit to deposit ratio were taken as the proxies of credit risk, and GDP growth rate, consumer price index and base rate were studied as indicators of macroeconomic variables. Following simple random sampling techniques, 14 commercial banks were selected as sample for the study. The required quantitative data were retrived from annual financial reports of the banks. Data were analyzed on Gretl software. The Pearson correlation and Ordinary Lease Square model for regression resulted that the GDP growth rate was insignificant in defining the variation on return on assets. Likely, inflation and base rate were not significant in defining the variation on earning per share. Result of this study provided sufficient scope to bankers in developing their growth strategies.

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Effect Of Gross Domestic Product, Liquidity, Size, Growth, Capital Adequacy Ratio, And Inflation On Financial Performance

Cited by 10 publications

References 4 publications

The Impact of Macroeconomic Factors on Banks’ Liquidity from 2008 to 2020

The Impact of Macroeconomic Factors on Banks’ Liquidity from 2008 to 2020

The Effect of Financial Performance on Return on Assets in Banks Before and During the Covid-19 Pandemic in Indonesia

Impact of Credit Risk and Macroeconomic Variables on the Profitability of Commercial Banks in Nepal

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