Abstract
Capital has an important role in maintaining safety of banks and in order to create a sound banking system. Banks are required to have a sufficient amount of capital, both to support its business expansion as well as a buffer to prevent any unexpected loss that banks might face and absorb losses arising from a variety of risks. Eventhough consists of four banks, State owned banks in Indonesia are catalystor for the banking industry in Indonesia. The failure of state-owned banks can affect the stability of Indonesian banking system. This study aims to study and analyze determinants of capital ratio of state-owned banks. Several variables have been used in previous studies to be used a proxy. The study applied panel data regression model. The capital ratio of state-owned banks is affected by asset growth (LNSIZE), equity to total liabilities ratio (EQTL), non performing loan (NPL), interest rate risk (IRR), and operational cost to operational revenue ratio (BOPO) on a different level of significance. Keywords: Capital structure, state-owned commercial banks, panel data JEL Classification: C23; G21; G32
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
