The Effect of Capital Adequacy Ratio, Net Interest Margin and Non-Performing Loans on Bank Profitability: The Case of Indonesia

Silaban, Pasaman

doi:10.35808/ijeba/135

Cited by 25 publications

(45 citation statements)

References 10 publications

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“…The results of this study indicate that any increase in NIM at the bank, ROA also in increase position. For this point, the result of this study are supported by research from Lartey et al (2013), Hardiyanti & Febriatmoko (2016, Silaban (2017), Yudha et al (2018), Pranowo et al (2020.…”

Section: The Effect Of Nim On Roasupporting

confidence: 86%

“…Results of this study support the findings of Puspitasari et al (2019) which did not find any effect of NPL on ROA. However, Căpraru & Ihnatov (2014), Silaban (2017), andYolanda, &Sumarni (2018) found that NPL have a negative effect to ROA.…”

Section: The Effect Of Npl On Roamentioning

confidence: 96%

“…Previous research related to return on assets (ROA) conducted by Lartey et al (2013) found that NIM has a positive effect on ROA. Silaban (2017) found that NIM has a positive effect on ROA, NPL has a negative effect, while the CAR not effect to ROA. However, Islam & Rana (2017) found that NPL has a negative effect on ROA, while LDR does not significant effect on the profitability in the private commercial banks of Bangladesh.…”

Section: Introductionmentioning

confidence: 92%

See 2 more Smart Citations

The Relationship Between Net Interest Margin and Return on Asset: Empirical Study of Conventional Banking in Indonesia

Puspitasari

Sudiyatno

Aini

et al. 2021

Acad. J. Interdiscip. Stud.

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Purpose of this study is to examine the relationship between net interest margin and return on assets by placing the net interest margin as the mediating variables. This study uses a sample of banks listed on the Indonesia Stock Exchange for the period 2015 to 2018. Data used is panel data, with data analysis using path analysis. Results showed that the capital adequacy ratio and non-performing loan do not have effect with NIM. We find a statistically significant negative effect between operating cost/operating income ratio and loan to deposit ratio for the NIM. NPL do not have effect with ROA, while CAR, BOPO, and LDR have a negative effect with ROA. However, NIM is positively related to ROA. The important things from this paper that from sobel test results shown that the NIM mediates the relationship between BOPO and LDR to ROA. Received: 21 January 2021 / Accepted: 10 March 2021 / Published: 10 May 2021

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Section: The Effect Of Nim On Roasupporting

confidence: 86%

Section: The Effect Of Npl On Roamentioning

confidence: 96%

Section: Introductionmentioning

confidence: 92%

See 1 more Smart Citation

The Relationship Between Net Interest Margin and Return on Asset: Empirical Study of Conventional Banking in Indonesia

Puspitasari

Sudiyatno

Aini

et al. 2021

Acad. J. Interdiscip. Stud.

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“…Beberapa studi sebelumnya menyebutkan bahwa faktor yang mempengaruhi profitabilitas bank yaitu Capital Adequacy Ratio (Dodi et al, 2018;Yusuf & Surjaatmaja, 2018;Akhyar et al, 2018), BOPO (Paulin & Wiryono, 2015;Nahar & Prawoto, 2017;Kusumastuti & Alam, 2019) dan non performing financing (Anwar, 2016;Nahar & Prawoto, 2017;Dodi et al, 2018). Akan tetapi, hasil temuan lainnya malah membuktikan bahwa aapital adequacy ratio, BOPO tidak berpengaruh signifikan terhadap profitabilitas (Said & Ali, 2016;Silaban, 2017;Hakim & Sugianto, 2018;Kusumastuti & Alam, 2019). Selanjutnya non performing loan juga merupakan indikator penting yang dapat mempengaruhi profitabilitas (Agustin, Hariswanto, & Bustamam, 2018;Bhattarai, 2016), namun didapati hasil studi empiris tersebut belum konsisten, sehingga penulis untuk mencoba menganalisis kembali pengaruh CAR, BOPO, dan NPF terhadap profitabilitas bank syariah, dengan memperhitungkan NPF sebagai variable moderasi yang mempengaruhi hubungan CAR dan BOPO dengan profitabilitas.…”

Section: Pendahuluanunclassified

Determinant of sharia banks profitability in Indonesia: The moderating effect of non performing financing

Muchtar

Azhari²,

Bensaadi

2021

JKMB

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This study aims to analyze the effect of capital adequacy ratio (CAR), operating cost of operating income (BOPO) on profitability and examine the role of non performing financing (NPF) in influencing the relationship between CAR and BOPO on profitability of sharia bank in Indonesia. The data used in this study is a panel data that consisting of 10 sharia banks for the period 2010-2018 with 99 observations. The method of analysis data is multiple regression analysis with random effect model. The results of this study in model one show that BOPO has negative and significantly affects profitability, meanwhile CAR has positive but insignificant effect, while and NPF has negative effect on profitability but insignificant in model two. Furthermore, when NPF interected with CAR shows interesting results, in which CAR has negative and significant effect on profitability, while BOPO is still consistent with negative and significant effect on profitability. This suggests that the NPF moderates the influence of CAR and BOPO on profitability. This implies that increase NPF would decrease the effect of CAR on profitability and the effect of BOPO on profitability would be strangted of syaria bank in Indonesia. Keywords: Capital adequacy ratio; BOPO; non performing financing, profitability

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“…As explained earlier, an increase in LDR will trigger an increase in ROA due to the higher interest income generated. This will be further strengthened when the value of the NIM gets higher, so that the profits generated will be even greater (Silaban 2017). Likewise, when the NIM is low, it will affect the relationship between LDR and ROA.…”

Section: Nim's Moderating Effect On the Relationship Between Ldr And Roamentioning

confidence: 98%

The Performance of Banks in Indonesia Based on Capital Perspective (BUKU), a case Study in a period of Decline in Profitability Performance

Akbar

2019

AFMJ

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This study aims to analyze and obtain empirical evidence regarding the effect of LDR on bank's profitability, and the variables that can moderate the influence of LDR on ROA. The object of this research is banks listed on the Indonesia Stock Exchange for the period of 2013 to 2016. 25 banks were selected using the purposive sampling method. The research object was divided into two categories, namely BUKU 1 and BUKU 2 banks, and BUKU 3 and BUKU 4 banks. The results showed that BUKU 1 and BUKU 2 banks were influenced by LDR and BI rate. Then, it moderated by OEOI. The study does not support the hypothesis that the NPL and NIM of BUKU 1 and BUKU 2 banks can moderate the influence of the LDR variable on ROA. While the influence of LDR on ROA of BUKU 3 and BUKU 4 banks was moderated by NIM and OEOI. The study does not support the hypothesis that the NPL of BUKU 3 and BUKU 4 banks can moderate the influence of the LDR variable on ROA.This study also supports the statement that the BI rate gives more influence to BUKU 1 and BUKU 2 banks than banks in the BUKU 3 and BUKU 4 categories.

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The Effect of Capital Adequacy Ratio, Net Interest Margin and Non-Performing Loans on Bank Profitability: The Case of Indonesia

Cited by 25 publications

References 10 publications

The Relationship Between Net Interest Margin and Return on Asset: Empirical Study of Conventional Banking in Indonesia

The Relationship Between Net Interest Margin and Return on Asset: Empirical Study of Conventional Banking in Indonesia

Determinant of sharia banks profitability in Indonesia: The moderating effect of non performing financing

The Performance of Banks in Indonesia Based on Capital Perspective (BUKU), a case Study in a period of Decline in Profitability Performance

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