Abstract
This study aims to examine the effect of financial performance, namely; Capital Adequacy Ratio (CAR), Net Interest Margin (NIM), Non-Performing Loan (NPL), Loan to Deposit Ratio (LDR), Return on Assets (ROA) and Operational Cost on Operational Income (BOPO) on stock price of state-owned Bank in Indonesia. The sample in the study is state-owned Bank registered at Indonesia Stock Exchange and still listed until 2018 namely; Bank Mandiri, Bank Negara Indonesia (BNI), Bank Tabungan Negara (BTN), and Bank Rakyat Indonesia (BRI). The collection of data is carried out by documentation technique. Technique employed in analyzing data is multiple regression analysis. The results found that (1) Capital Adequacy Ratio (CAR), Net Interest Margin (NIM), Non-Performing Loan (NPL), Loan to Deposit Ratio (LDR), Return on Assets (ROA) and Operational Cost on Operational Income (BOPO) simultaneously affect stock price of state-owned Bank in Indonesia. (2) Partially, NIM, NPL, LDR, ROA, BOPO variables have an insignificant effect on stock price of state-owned Bank that already have gone public on Indonesia Stock Exchange. While CAR has a significant influence on stock price of state-owned Bank that already have gone public on Indonesia Stock Exchange. This accordingly provides an indication that stock price of a state-owned Bank in Indonesia is not predominantly determined by its financial performance, but by public's trust in state-owned Bank concerned.
Highlights
Overall bank performance is a picture of the achievements of the bank in its operations, both related to financial aspects, marketing, fundraising, technology, and human resources (Ardimas, Ekonomi, & Gunadarma, 2014; Kurniawan, 2015; Mawardi, 2015)
Hypothesis Test Results show that the Non-Profit Loan (NPL) variable does not have a significant effect on stock prices
The Capital Adequacy Ratio (CAR) ratio set by Bank Indonesia is a minimum of 8%, if the CAR ratio of a bank is below 8%, it means that the bank is unable to absorb losses that may arise from the bank's business activities, if the CAR ratio is above 8%, it indicates that the bank is increasingly solvable
Summary
Overall bank performance is a picture of the achievements of the bank in its operations, both related to financial aspects, marketing, fundraising, technology, and human resources (Ardimas, Ekonomi, & Gunadarma, 2014; Kurniawan, 2015; Mawardi, 2015). Bank financial performance is a picture of the financial condition of a bank in a given period both concerning aspects of fundraising and fund distribution which are usually measured by indicators of capital adequacy, liquidity, and bank profitability. As an intermediary between parties who have excess funds and those who need funds, banks are required to have a healthy financial performance, so that the intermediation function can be carried out properly.
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