Profitability Determinants of Go-Public Bank in Indonesia: Empirical Evidence after Global Financial Crisis

Abstract

This study aims to get empirical evidence, to examine and explaining the profitability determinants of go public bank in Indonesia based on management or owner interest. This research was conducted at go public bank or listed in Indonesia Stock Exchange with observation period of 2009-2013. Research population is 25 banks. Analysis method is regression linier analysis.Research results found that only credit growth has positive effect on return on assets (ROA), while the other variables as credit risk, income diversification, operational efficiency, capital adequacy ratio (CAR), market structure, GDP growth and inflation does not affect on return on assets (ROA). Profitability determinant factor in according owner interest show that operational efficiency becomes a determinant variable of return on equity (ROE). Other variables as credit risk, income diversification, capital adequacy ratio (CAR), credit growth, market structure, GDP growth and inflation does not affect the return on equity (ROE). The research findings provide support for the agency theory where there is different interest or approach between management and owners to determine profitability factors.