Profitability Of Banks In Indonesia Research Articles

Determining Factors of Bank Profitability in Indonesia and Malaysia

This stutdy analyzes the influence of financial technology on profitability in banks Indonesia and Malaysia for the 2017-2022. The influence of financial technology in this research is measured by the frequency of ATM, internet banking, mobile banking and E-Money transactions as independent variables, while bank profitability is measured by return on assets as the dependent variable. The type of data used is quantitative data. The data source used in this research is secondary data in the form of financial reports published on the banking company’s official website. Purposive sampling was used to select five banks in Indonesia as samples. The analysis technique in this research uses Smart PLS 3.0 by analysing the inner model such as the coefficient of determination and hypothesis testing. The research result show that partially, ATM transactions have no effect on ROA in banks Indonesia and Malaysia, internet banking transactions have a positive effect on ROA in banks Indonesia but have no effect on banks in Malaysia, mobile banking transactions have a negative effect on ROA in banks Indonesia and Malaysia, E- Money transactions have no effect on ROA in banks Indonesia but have a significant positive effect on banks in Malaysia. Simultaneously, ATM transactions, internet banking, mobile banking and E-Money influence ROA in banking Indonesia and Malaysia

The Effect of Bank Efficiency, Industry Specification, and Macroeconomic on Banking Profitability in Indonesia

Banking in Indonesia has a long and dynamic history. The banking industry in Indonesia has distinctive and diverse characteristics. Banking in Indonesia faces various challenges and opportunities in the future. The purpose of this study is to analyze The Effect of Bank Efficiency, Industry Specification, and macroeconomic factors on the profitability of banks in Indonesia using double log regression. By using double log regression. The process of obtaining data uses secondary data obtained from OJK, BEI, and BI, and the data used is financial data of five banks with the highest profitability. Consisting of ROA, OER, HHI, Concentration Ratio, GDP Growth and GDP per Capita. The results of the study state that OER has a positive but insignificant effect on roa, CR has no significant effect on ROA, hhi has a positive but insignificant effect on ROA, GDP growth has a negative and significant effect on ROA, GDP per capita has a positive but insignificant effect on ROA, And simultaneously each dependent variable affects the independent variable.. This indicates that banking in Indonesia must be vigilant of the macroeconomic fluctuations that can affect the stability of the financial system, as well as take advantage of the opportunities in the domestic and international markets to increase their income and market share.

Analysis of the Effect of Monetary Policy on Bank Profitability in Indonesia During the Pandemic

Analysis of the Effect of Monetary Policy on Bank Profitability in Indonesia During the Pandemic

Pengaruh Green Banking Terhadap Industri Perbankan di Indonesia

The problem currently being faced by banks regarding profitability is that it is experiencing a decline due to still recovering after the Covid-19 pandemic that hit from 2019-2021. One way for banks to overcome this problems, green banking can also help banks overcome problems related to envirommental damage. Green banking practices can help the surrounding enviromment to be more protected because it leads to digitalizing and paperless. This research aims to analyze the influence of geen banking on bank profitability in Indonesia for 5 years. Sampling in this study used a purposive sampling technique and 7 banks were obtained that met the criteria. The analysis method used in this research is panel data by testing via Eviews 10. The independent variable variable is green banking with projections (ATM units, paper use, water use) while the dependent variable is bank profitability with ROA projections. The resuts of this research are that ATM units have an effect on ROA, while paper use and water use have nothing to do with ROA. Howefer in simultaneous testing it was found that the implementation of green banking projected in ATM units, paper use, and water use had a positive and significant influence on profitability.

The Impact of Green Banking on Profitability (Study on Banking Sector Listed on Indonesia Stock Exchange (IDX) Period 2016-2022)

The objective of this study is to determine the impact of green banking on profitability of banks in Indonesia. The sample of this research is the Indonesian banking sector during the period 2016 to 2022. The data utilized in this study were obtained from secondary sources, specifically from 9 banks. In total, there were 63 observations. The measurement of profitability ratio is conducted through the utilization of Return on Asset (ROA). The study using data panel analysis resulting green banking using 21 reported items of Green Banking Disclosure Index positively have impact on profitability of banks. It implies that the increasing green banking practices will increase the profitability of banks, highlighting the use of the separate green banking index measurements outside of the total green banking index might be considered by future researchers

The Impacts of Green Credit Policy, Bank-Specific, Industry-Specific, and Macroeconomic Variables on Bank Profitability in Indonesia

The Impacts of Green Credit Policy, Bank-Specific, Industry-Specific, and Macroeconomic Variables on Bank Profitability in Indonesia

The Impact of Monetary Policy on Capital Structure, Credit Risk and Bank Profitability in Indonesia

The Impact of Monetary Policy on Capital Structure, Credit Risk and Bank Profitability in Indonesia

Analysis of banking competition in Indonesia and its impact on profitability: Structure conduct performance (SCP) approach

In the past decade, the profits obtained by banks in Indonesia have generally tended to increase, except during the pandemic. However, the number of banking business actors in Indonesia has continued to decline, indicating that the banking structure is becoming more concentrated and potentially leading to an oligopoly. Therefore, the purpose of this study is to determine whether the increasingly concentrated banking market structure or weak competition has a significant impact on the growing profitability of banks in Indonesia. If this hypothesis is proven true, it would suggest that banking, as a financial intermediary, contributes to higher costs for economic development, particularly within financial markets. In this study, the Lerner index is employed to measure the level of concentration or competition among banks. Subsequently, the Treatment Effect Model is utilized to estimate the extent of the impact of competition levels on profitability within the banking sector. The findings of the study reveal two key points. Firstly, the reduction in the number of banking players has been accompanied by increased competition among banks in Indonesia, particularly evident after 2016. Secondly, a higher level of concentration or reduced competition corresponds to increased opportunities for banking profitability. Consequently, there are indications that the decrease in the number of banking business actors in Indonesia is correlated with heightened competition, suggesting improved efficiency in banking management. This phenomenon could elucidate the reason why profitability in the banking sector appears to be on the rise despite a decrease in the number of banking players.

Impact of Green Banking Implementation, Financial Performance, and Covid-19 Crisis on Islamic Bank Profitability in Indonesia

The purpose of this research is to test empirically the impact of green banking implementation, financial performance, and Covid-19 crisis on Islamic bank profitability in Indonesia for the period of 2015-2021. This study uses two quantitative approaches, specifically static panel data method and dynamic panel data method (generalized method of moments or GMM). The secondary data used in this paper with a total sample of 10 Islamic commercial banks in Indonesia. This study finds that the implementation of Green Banking as the main determinant has a significant relationship to the profitability of Islamic Banks in Indonesia. The study also finds that financial performance variables such as CAR, NPF, and OEF show that contribution to the level of Islamic bank profitability in Indonesia. Further, other finding regarding the dummy crisis variable, Covid-19 crisis finds that a strong relationship to the Islamic bank profitability. It means that Covid-19 crisis will impact negatively to Islamic bank profitability in Indonesia. Based on the results of the robustness check, the model in this research is stated to be robust. The findings are expected to be useful for policy makers as well as for Islamic banking circles. Research results can be used as input in formulating policies in achieving sustainable development goals and economic and social recovery programs after the Covid-19 pandemic.

The Determinant of Foreign Custodian Bank Profitability in Indonesia (Study in Foreign Custodian Bank Period 2015-2020)

The Determinant of Foreign Custodian Bank Profitability in Indonesia (Study in Foreign Custodian Bank Period 2015-2020)

PENGARUH DIVERSIFIKASI PENDAPATAN DAN MARKET POWER TERHADAP PROFITABILITAS PADA PERBANKAN DI INDONESIA (STUDI PADA BANK UMUM KONVENSIONAL DI INDONESIA PERIODE 2016-2020)

This study investigated the relationship between revenue diversification and market power on the profitability of commercial banks in Indonesia. This study uses data from commercial banks in Indonesia and further analysis of data from commercial banks that have moderately diversified their income for the 2016 -2020 period. This study using the purposive sampling method will obtain a sample of 87 commercial banks and 13 commercial banks that have diversified moderately. The results of this study indicate that revenue diversification has no significant effect on the profitability of commercial banks in Indonesia and commercial banks that home diversified moderate in Indonesia. The results of market power do not have a significant effect on the profitability of banks in Indonesia and/ market power has a positive and significant effect on banks that here diversified moderately.

Determinants of Green Credit and Their Influence on Banking Profitability in Indonesia

Green finance involves efforts to internalize environmental externalities and adjust risk perceptions to encourage environmentally friendly investments and reduce those that are harmful to the environment. One form of green financial support is the provision of green credit by banks. This research aims to test the effect of green credit on bank profitability, and test the effect of capital adequacy, operational efficiency, credit risk and bank size on bank profitability. This research also examines the influence of capital adequacy, operational efficiency, credit risk and bank size on green credit. The population in this study are banks operating in Indonesia with a sample of all banks that have a commitment to green credit. To test the hypothesis, use panel data regression analysis. After conducting a model test, the best model was obtained, namely the fixed effect model. The results of research using the fixed effect model show that green credit in Indonesia is not influenced by bank capital adequacy, bank operational efficiency, bank liquidity, bank credit risk, and bank size. However, green credit has a significant positive effect on bank profitability in Indonesia. Another result is capital adequacy, which has a positive effect on profitability, while operational efficiency and bank size have a significant and negative effect on profitability, while credit risk has no effect on profitability.

The Determinants of Islamic Commercial Bank Profitability in Indonesia during 2012-2018

The Determinants of Islamic Commercial Bank Profitability in Indonesia during 2012-2018

Faktor-Faktor yang Mempengaruhi Profitabilitas Bank: Studi pada Perbankan Swasta di Indonesia

This research aim is to investigate the factors that influence bank profitability in Indonesia especially with some banking ratio such as loan to deposit ratio, capital adequacy ratio and non-performing loan. All the independent variables are characteristic measurement for banking sector with profitability as dependent variables. There are 40 private banks in the population who listed on Indonesia Stock Exchange on 2019-2020 and 24 were chosen with purposive sampling. Moreover, multiple linear regression (MLR) with classical assumption test is statistic method to test the hypothesis. The result shows that only loan to deposit ratio which has no influence to return on asset as proxies for profitability. Statistically proven that capital adequacy ratio has a positive impact to profitability, meanwhile non-performing loan has a negative impact to profitability. This research will contribute to the existing theories of liquidity risk and trade off theory between liquidity and profitability.

Pengaruh Tabungan Mudharabah, Deposito Mudharabah Dan Pembiayaan Mudharabah Terhadap Peningkatan Laba Bank

This study aims to determine the effect of mudharabah deposits and mudharabah savings both partially and simultaneously on the profitability of banks in Indonesia. The data used in this study are data collected from annual reports published by banks in Indonesia that are registered in 2022. The analytical technique used in this study is multiple linear regression analysis. The results of data analysis show that mudharabah deposits have a partial positive and significant effect on profitability, mudharabah savings have a partial positive effect but not significant. Mudharabah deposits and mudharabah savings simultaneously affect profitability.

Determinan Profitabilitas Bank Studi Empiris di Indonesia

This study aims to investigate the determinants that impact the profitability of 20 banks in Indonesia period from 2013 to 2021, as low profitability reduces banks' ability and willingness to finance the broader economy. The study uses panel data analysis, conducting three profitability bank measures: the net interest margin, the return on assets, and the return on equity. Inflation and gross domestic product growth were control variables that had not been studied in prior studies. The study's findings indicate that capital adequacy ratio, nonperforming loans, operation expenses, and bank size have strong effects on profitability. The study also finds that inflation and gross domestic product growth variables influence bank profitability. The study also finds that the direction of causality is not consistent among bank’s profitability measurements. According to our knowledge, this study is the first to investigate internal and external determinants of bank profitability in Indonesia that have not been studied previously. Keywords: bank’s profitability, bank size, capital adequacy ratio, nonperforming loans, operating expenses

Assessing the internal factor affecting the bank profitability in Indonesia: Case of dual banking system

Purpose – In an uncertain economic condition, maintaining companies’ profitability is essential. This study aims to analyze and assess the factors that affect bank profitability by focusing on internal factors such as capital, size, asset quality, and liquidity risk. This study also observed the effect of Islamic and conventional banking in Indonesia with a comprehensive profitability analysis as measured by ROA, ROE, and NIM/NOM.Methodology – The method used in this research was panel data regression. The data studied were derived from the quarterly reports of Islamic and conventional banking in Indonesia for five years, from 2016 to 2020.Findings – The results showed that conventional banking in Indonesia had a higher level of profitability than Islamic banking. The profitability of conventional banks is significantly influenced by the level of equity, size, CKPN, and LDR. On the other hand, Islamic banking in Indonesia generally has a lower level of profitability, but in terms of individual performance, the value was not inferior to conventional banking. Variables that significantly influence the profitability of Islamic banking included equity, CKPN, and FDR.Implication – Banks in Indonesia must improve their performance so that the development of asset size can be in line with the level of profitability generated, maintain asset quality so that the health of the bank is maintained, and has proportional equity and LDR/FDR value.Originality – This research used three profitability ratios: ROA, ROE, and NIM/NOM, and analyzed Islamic and conventional banking, considering that Indonesia has a dual banking system, so the analysis carried out was more comprehensive.

DETERMINANTS OF BANK PROFITABILITY IN INDONESIA BASED ON COMMERCIAL BANK BUSINESS ACTIVITIES (BUKU)

This study aims to determine the determinants of the profitability of banks in Indonesia based on the Commercial Group Business Banks (BUKU). Descriptive and verification methods used on secondary form bank that go public in Indonesian Stock Exchange. The dependent variable is Return on Assets (ROA) and the independent variables are Capital Adequacy Ratio (CAR), Loan to Deposit Ratio (LDR), Operational Expense of Operating Income (OEOI) and Net Interest Margin (NIM). The results showed that in BUKU 2, OEOI has a significant negative effect on ROA while CAR and LDR have a negative and insignificant effect on ROA and NIM has a positive and insignificant effect on ROA. In BUKU 3, it showed that CAR has a significant positive effect on ROA, for LDR and NIM has a positive and insignificant effect on ROA while for OEOI it has a negative and insignificant effect on ROA. In BUKU 4, CAR, LDR and ROA have negative and insignificant effect on ROA and NIM have a significant positive effect on ROA. Simultaneously, CAR, LDR, OEOI and NIM have an effect on ROA for Bank BUKU 2,3 and 4.

Pengaruh Faktor Permodalan Dan Risiko Likuiditas Terhadap Profitabilitas Yang Dimediasi Risiko Pembiayaan Pada Bank Syariah

Profitability is a performance indicator that describes a bank's ability to manage its assets into profit. The purpose of this study was to examine the effect of the analysis of the influence of capital factors and liquidity risk on the profitability of Islamic commercial banks in Indonesia mediated by financing risk. This study uses data on the annual financial statements of Islamic Commercial Banks Registered and Supervised by the Financial Services Authority for the 2014-2019 period. By using the Purposive Sampling method with a sample of 10 banks. The analytical method used is multiple linear regression analysis. The results showed that the capital factor had a negative and significant effect on financing risk, liquidity risk had no significant effect on financing risk, capital and liquidity risk factors together had a significant effect on financing risk and risk had a significant effect on profitability.

The Effect Covid-19 and Sectoral Financing on Islamic Bank Profitability in Indonesia

COVID-19 pandemic has created a new economic crisis worldwide. Islamic Bank which was reportedly resilient against the financial crisis is expected to be stable in this period. Apart from that, Islamic Bank has channeled financing fund to various business sectors with different portions leading to a question whether they have different impact on Bank. This paper aims to discover the impact of COVID-19 pandemic and financing to business sectors on Islamic Bank profitability. An ARDL approach is employed for analysis. The result of the study shows that COVID-19 pandemic has a negative relationship with Islamic Bank profitability in the long-run. Furthermore, financing to transportation, warehousing and communication sectors is associated with higher profitability in the short-run. On the other hand, financing to wholesale and retail trade sectors hurt Islamic Bank profitability. Based on this result, it is suggested that Government impose some measures in stabilizing Islamic Bank’s performance during COVID-19 pandemic. In addition, Islamic Banks are expected to make adjustment on financing to business sectors ratio accordingly in order to maintain the profitability of Islamic Bank.