Performance Of Indian Banks Research Articles

Analysis Of Bank Performance Before And After Covid 19 In Banking Companies Listed On Idx

This study aims to analyze the banking performance before and after covid 19 in banking companies listed on the IDX. In this study, the banking performance indicators analyzed are the CAR (Capital Adequacy Ratio), BOPO (Operating Expenses to Operating Income), NIM (Net Interest Margin), LDR (Loan to Deposit Ratio), and ROA (Return On Assets). The sample used is banking companies listed on the Indonesia Stock Exchange (IDX) in 2019 and 2020 with the total of 43 banks. This study an event to examine the differences or changes in banking financial performance, before covid 19 and after covid 19. The data analysis technique used is the average difference test using SPSS program. Based on the test results, it was found that the COVID-19 pandemic caused the BOPO, NIM, LDR and ROA ratios to decrease or worsen, while the CAR ratio increased.

ANALYSIS OF PERFORMANCE OF PUBLIC AND PRIVATE SECTOR BANKS IN INDIA

Banking sector promotes balanced regional development in the country by making necessary financial structure and funds available for the backward areas. It also promotes primary sector by providing timely credit to agricultural farmers. It also enhances standard of living of the people by providing loans to customers for purchase of houses, consumer goods, electronic goods etc. Hence, it has become necessary to study the performance of the Banks in India because if the performance of the banks is positive, it can result into positive growth in economy. Thus, the present study has been undertaken with an objective to study financial performance of the Public as well as Private Sector Banks in India. The objective of the study is to analyze the performance of Public and Private Sector Banks in India for the duration of 5 years i.e. 2015-16 to 2019-20. It can be concluded from the study that there has been significant difference in performance of the selected public and private sector banks in India during the study period. For the purpose of the study 6 variables have been selected and it can be concluded that the selected public and private sector banks differed from one another in case of all the variables. Hence, it can be said that despite the difference in various variables of the selected public and private sector banks have had been almost same during the study period.

Determination of shareholders’ welfare with financing quality as a moderating variable

The purpose of this study was to analyze the factors that might affect the shareholder welfare ratio (ROE). These factors include independent variables consisting of financing distribution ratio (FDR), low-cost funds ratio (CASA), net operating margin ratio (NOM), expense-based income ratio (FIR), and Financing Quality ratio (NPF). Furthermore, to determine the relationship of Islamic bank performance indicators on shareholder welfare with the ROE ratio indicator, NPF is a moderate variable. The method used to analyze the holder's welfare ratio (ROE) is moderate regression analysis with the error error model (ECM). The research sample used is the entire research population, namely monthly data from the Islamic banking industry for the period 2012-2020 (consisting of 14 Islamic commercial banks and 20 Islamic business units). The results of this study note that in the long run: FDR has a positive and significant effect on the ROE ratio, the NOM ratio has a negative and significant effect on the ROE ratio. While the variables of CASA ratio, FIR ratio and NPF have no effect on the ROE ratio. Furthermore, the NPF Moderating Variable strengthens the relationship of all direct and significant variables with the Shareholder Welfare Ratio (ROE), namely NPF moderates the negative and significant effect of FDR on the ROE ratio, NPF moderates the positive and significant effect of the ratio. on the ROE ratio. Furthermore, other variables NPF Moderating Casa and FIR have no effect on the ROE ratio. For the short term: FIR has a positive and significant effect on the ROE ratio, the NOM ratio has a negative and significant effect on the ROE ratio. While the FDR ratio, CASA ratio and NPF ratio variables have no effect on the ROE ratio. Furthermore, the NPF variable strengthens the relationship of all variables directly and significantly to the Shareholder Welfare Ratio (ROE), namely NPF moderates the negative and significant effect of FIR on the roe ratio, NPF moderates the positive and significant effect of the ratio. on the ROE ratio. While other variables, moderate NPF, FDR and CASA, have no effect on the ROE ratio. The implication of this study is to measure the welfare of shareholders, in this case the performance of Islamic banks with the ROE ratio approach. Why is the welfare ratio of all shareholders (ROE) important, because in accordance with the existence of Islamic banks it aims to provide benefits (maslahah) for the ummah. Islamic banks in carrying out their mandate have a commitment to be able to provide expectations from shareholders in the company and be able to develop products that are in accordance with the wishes and needs of customers. So from this study it can be said that of the 5 variables that affect the price. financing distribution ratio (FDR), low cost funds ratio (CASA), net operating margin ratio (NOM), cost-based income ratio (FIR) and Financing Quality ratio (NPF).

The pass-through effect of unconventional monetary policy to net interest income structure of European banks

Purpose: Financial banking intermediaries are sensitive to changes in market interest rates. The volatility of market interest rates affects the level of bank net interest income and determines the bank interest rate policy. Banks are actively managing structural interest rate risks to mitigate the negative effects of changes in market interest rates. The post-crisis period is characterised by unconventional monetary policy, and one of the basic objectives of the monetary instrument is a negative interest rate policy. This paper researches the effects on the bank net interest income structure with an impact on bank performance indicators. The basic research hypothesis is that during the financial crisis and a negative interest rate policy, the movement of bank interest income does not converge compared to a bank interest expense. Methodology: According to the characteristics of the dataset, which includes 32 listed banks from Great Britain, Switzerland and the European Union for the period 2002-2019, panel data analysis is applied. To analyse the effect of the interest rate level on total interest income and total interest expense, we formed two models. Fixed-effects models were used for parameter estimation. Results: A bank interest expense is more sensitive to unconventional macroeconomic policy than bank interest income. Conclusion: The traditional interest earning customer related business can enable banks to stabilise the bank performance indicator during market disruption.

The Effect of COVID-19 on the Profitability of Commercial Banks in Bangladesh

Purpose: Every component of the global financial system has suffered serious harm due to the present COVID-19 pandemic, and Bangladesh is not an exception. The banking sector’s performance and profitability have been impacted as a result. In this paper, we analyze the effect of COVID-19 pandemic on the financial performance of banking sector in Bangladesh before and throughout the present era of COVID-19. Methodology: In this regard, the study considered the 14 banks over the period of 2014-2021. The random-effects regression model is utilized to identify the profitability drivers. The random effect model investigates the influence of bank-specific variables and macroeconomic variables on the profitability of banks. Findings: During the pandemic era of COVID-19, our article found that a high degree of nonperforming loans, retaining more liquid assets, and a significant amount of hedging funds reduced banks' profitability. In contrast, a suitable bank size, non-interest revenue, inflation rate, and population growth increased the bank's performance indicators throughout this time. Practical Implications: This study's findings will aid financial policymakers in identifying profit-enhancing loopholes and implementing preventative actions during crisis periods such as COVID-19. Originality: The profit influencing factor include both bank and economic oriented, some of which were not previously considered in Bangladesh-specific studies. Incorporating these additional criteria and the independent examination of the pandemic era helps us to get new perspectives on the elements that influence commercial banks’ profitability.

Role of banking sector performance in renewable energy consumption

To secure future universal access to modern energy, large investments in renewable energy technology are required. This paper estimates the impact of five banking sector performance indicators (return on asset, market capitalisation, asset quality, managerial efficiency and financial stability) on renewable energy consumption for a global panel consisting of 124 countries. The study used two-step system-GMM panel model to handle potential endogeneity and serial correlation. The paper considers three homogenous subpanels which are constructed based on the income group classification (high-, middle-, and low-income countries). Generally, our results show that improved banking sector performance enhances renewable energy consumption, with heterogenous effect across income group classification. For high -income (HI) countries, an increase in bank size together with improved asset quality and managerial efficiency have positive effects on renewable energy consumption. For middle-income (MI) and low-income (LI) countries, a high return on asset, an increase in bank size and financial stability are positive determinants of renewable energy consumption. We also find heterogenous effect of banking performance indicators across various renewable energy consumption types. The results highlight the importance of a well-functioning bank sector to achieve the investment in renewable energy needed to meet future energy demand and simultaneous decrease CO2 emissions.

Monetary policy collision on the performance of banking sector in India

Purpose The study aims to identify the impact of monetary policy tools on the performance of banks in India, and this could be an excellent suggestion to the regulators in framing the favourable interest rates which would meet the macroeconomic objectives of the Indian economy. Design/methodology/approach The design adopted in this study is descriptive and analytical research. Correlation and regression analysis is used to determine the relationship between bank rate (BR) and the performance of public sector banks in India. The sample chosen for this study is the public sector banks actively performing in India. Findings The performance is measured by taking three factors, and they are deposits, loans and advances (L&A) and total asset value of the banks. All three factors have shown an impact of BR on them during the five years. L&A affected the least amongst the three factors, but the other two were significantly impacted by the change in BR by the Reserve Bank of India. So, there should be a favourable fluctuation in the BR which will bring flexibility in the banking system, and they can perform well in the economy and the central bank also can concentrate on the macro-economic situation in the country. Originality/value This paper helps in giving suggestions to the Central bank, researchers, financial institutions to look into the financial performance and monetary policy rates and the central bank also can concentrate on the macro-economic situation in the country.

أثر مؤشرات الأداء البنکی فی أسعار الأسهم دراسة تطبیقیة فی البنوک المدرجة فی بورصة الأوراق المالیة المصریة

تهدف الدراسة إلى تحديد أثر مؤشرات الأداء البنکي: (کفاءة إدارة التسويق، وکفاءة إدارة الربحية، وکفاءة إدارة المخاطر، وکفاءة إدارة السيولة) في أسعار أسهم البنوک المدرجة في بورصة الأوراق المالية المصرية. استخدمت الباحثة المنهج الوصفي التحليلي، وقدتمثل مجتمع الدراسة في جميع البنوک المدرجة في بورصة الأوراق المالية المصرية، والبالغ عددها (12) بنکا، وقد تم اختيار عينة مکونة من خمسة بنوک مدرجة في بورصة الأوراق المالية المصرية، أي: بنسبة 41.66%. خلال الفترة الممتدة بين العامين (2017م، 2019م)، وتتمثل بالآتي: (البنک التجاري الدولي، وبنک قطر الأهلي الوطني، وبنک الکويت الوطني- مصر، والبنک المصري الخليجي، وبنک التعمير والإسکان). تم الاعتماد على التقارير السنوية للبنوک خلال الفترة المنشورة على المواقع الإلکترونية الخاصة بالبنوک عينة الدراسة، بواقع (15) مشاهدة (5 بنوک لمدة 3 سنوات)، ونشرات التداول المنشورة على موقع بورصة الأوراق المالية المصرية. وقد توصلت الدراسة إلى وجود أثر ذي دلالة معنوية لمؤشرات الأداء البنکي: (کفاءة إدارة التسويق، وکفاءة إدارة الربحية، وکفاءة إدارة المخاطر، وکفاءة إدارة السيولة) في أسعار أسهم البنوک المدرجة في بورصة الأوراق المالية المصرية. وقد أوصت الدراسة بأن رفع کفاءة إدارة التسويق في البنوک المدرجة في بورصة الأوراق المالية المصرية أمر ضروري؛ وذلک لزيادة الطلب على أسهم البنوک، وزيادة التداول فيها. The study aimed to determine the impact of banking performance indicators (efficiency of marketing management, efficiency of profitability management, efficiency of risk management, Efficiency of liquidity management) on the share price of banks listed on the Egyptian Stock Exchange. The researcher used the descriptive and analytical approach, and the study community was represented by all the 12 banks listed on the Egyptian Stock Exchange, and a sample consisting of five banks listed on the Egyptian Stock Exchange was selected, i.e. 41.66%. During the period between the two years (2017-2019), represented by the following: (Commercial International Bank, Qatar National Bank, National Bank of Kuwait - Egypt, Egyptian Gulf Bank, and Development and Housing Bank). The annual reports of the banks during the period and which were published on the websites of the banks in the study sample, were relied on (15) views (5 banks for 3 years), and the trading bulletins published on the Egyptian Stock Exchange website. The study found that there was a significant impact of the banking performance indicators (efficiency of marketing management, profitability management efficiency, risk management efficiency, liquidity management efficiency) on the share prices of banks listed on the Egyptian Stock Exchange. The study recommended that the necessity to raise the efficiency of the Marketing Department in the banks listed on the Egyptian Stock Exchange, in order to increase the demand for bank shares and increase circulation in them.

Does social reporting matter? Empirical evidence

Purpose This paper aims to examine the level of Islamic social reporting (ISR) disclosure of Islamic banking in Gulf Cooperative Council (GCC) countries using a checklist based on Accounting and Auditing Organization for Islamic Financial Institution (AAOIFI) standards. Design/methodology/approach A quantitative method – Tobit Model – is adopted in this study. The unweighted disclosure method used to measure the ISR disclosure checklist consist of 51 items in Islamic banks (IBs) in the GCC countries. The stakeholder theory and legitimacy theory are used to investigate the possible banking performance factors affecting the accounting practices such as ISR disclosure in IBs. Findings The findings show that the ISR disclosure index is linked to the IBs’ performance indicators in GCC countries. The result indicates both Islamic banking profitability and age establish positive and statistically significant relationship with ISR disclosure while leverage establishes significant negative relationship with ISR disclosure. This implies that Islamic banking profitability, leverage, and age are essential bank performance indicators that make ISR disclosure worthy of doing even in the presence of Islamic bank stakeholders in GCC countries. This finding linked compliance with the mandatory disclosure recommendations of AAOIFI Standard No. 7, as well as voluntary disclosure. Research limitations/implications This study used cross sectional data for the year 2019, which is considered more recent despite its being a year data analysis. However, future research should consider mix method as well as more analysis tools provided their number of observations are sufficient enough. Social implications The study identifies the factors that may enhance Islamic financial institutions, including Islamic banking in GCC countries, to comply with ISR disclosure. The application of this study supports Accounting standards setters to consider standards that support ISR disclosure in Islamic banking in different countries. Originality/value To the best of the authors’ knowledge, this study is novel in exploring the level of ISR disclosure in Islamic banking in GCC countries by using a checklist based on AAOIFI standard No. 7 and establishes the relationship between ISR disclosure index and IBs profitability, leverage, as well as age of Islamic banking in operation.

Makroekonomik değişkenler ve içsel faktörler ile bankaların finansal performansı arasındaki ilişki: Türkiye için ampirik bir araştırma

Bu çalışmanın amacı Borsa İstanbul (BIST)’da faaliyet gösteren bankaların finansal performansı ile makroekonomik değişkenler ve içsel faktörler arasındaki ilişkiyi araştırmaktır. Bu amaçla BIST’de faaliyet gösteren bankaların 2005-2017 dönemine ilişkin verileri analiz edilmiş ve regresyon yöntemi kullanılmıştır. Bankaların finansal performans göstergeleri olarak aktif karlılık oranı (ROA), öz kaynak karlılık oranı (ROE), Tobin’s Q (TOBIN) oranı ve fiyat/kazanç (F/K) oranı araştırmada yer almış olup, çalışmanın bağımlı değişkenleridir. Makroekonomik değişkenler olarak enflasyon ve işsizlik kullanılmıştır. Toplam aktifler, finansal kaldıraç ve yaş değişkenleri araştırmanın içsel faktörleridir ve makroekonomik değişkenler ile birlikte araştırmanın bağımsız değişkenlerini oluşturmaktadır. Araştırma sonuçlarına göre finansal performans göstergeleri olan aktif karlılık oranı (ROA), öz kaynak karlılık oranı (ROE), Tobin’s Q (TOBIN) oranı ve fiyat/kazanç (F/K) oranı toplam aktifler, finansal kaldıraç ve yaş değişkenleri ile istatistiki olarak anlamlı bir ilişkiye sahiptir. Buna karşın söz konusu finansal performans göstergeleri ile makroekonomik değişkenler arasında anlamlı bir ilişki tespit edilememiştir. Tahmin edilen tüm modellerde finansal performans göstergeleri ile toplam aktifler arasında anlamlı ve pozitif yönlü bir ilişki tespit edilmiştir. Finansal performans göstergeleri ile finansal kaldıraç oranı ve yaş arasında negatif yönlü bir ilişki bulunmaktadır. Buna göre bankaların toplam aktiflerini istikrarlı bir şekilde büyütmeleri bankaların finansal performansını olumlu yönde etkilemekte ve karlılığı arttırıcı bir faktör olarak öne çıkmaktadır.

Financial inclusion and banks' performance: Evidence from Palestine

This study aims to examine the relationship between financial inclusion indicators and bank performance in Palestine. The study population and its sample include all 15 banks operating in Palestine and cover the period 2006 to 2016 with panel data from 162 observations. To interpreter the variables, the study uses the volume of loans to SMEs (usage), banking penetration, number of ATMs and branches (access), and online banking, the latter if it is a dummy variable. Further, the study uses operational profits, total revenues and ROE as bank performance indicators and dependent variables. Using empirical analysis, the results indicated that banking penetration tools, branching and ATMs, could enhance bank performance. Despite the decline in lending to SMEs, this factor could positively improve the performance of banks in Palestine. In general, financial inclusion helps banks improve their performance and increase their revenues. This study recommends that government organizations can use the obtained results to formulate their strategies and agendas for improving financial inclusion in Palestine and other developing countries. Acknowledgment The author is thankful to Bo Liu and Azzam Hanoon for their comments and suggestions to improve this paper. The author discloses that funding for the writing of this paper comes from the TAAWON research fund.

Banks and their technology investment decision are aligned or not – an experience of Indian banks

Purpose The purpose of this study is to measure the impact of technology spend on bank profitability focusing on Indian public and private sector commercial banks. The study also assesses the longevity duration of impact for both public and private sector banks. The trade-off is created between the bank’s profitability and technology spent across four identified columns: increase product sales, reduce cost, enhance employee efficiency and optimally use existing resources. Design/methodology/approach The metrics of four columns converted to measurable 11 financial alarming indicators and impact is again checked on profitability indicator ROE. The data used for empirical analysis for the study are between the year 2003 and 2019, across 12 public and 15 private banks. The interface between technology spend and profitability is measured using panel vector autoregression (VAR) and panel vector error correction model (VECM) and further the link between 11 financial indicators and profitability measures is established using panel data analysis. Findings The study found that there is a mixed effect of technology spent on profitability and performance of Indian banks, where public sector banks were found to be more unstructured over private sector banks. The study advises the optimal technology spend strategies to gain enhanced productivity for banking business which are to name a few – planned technology reserves, customer awareness campaigns for products, robust employee-customer motivation policy and customized technologies aligned to existing infrastructure. Originality/value The data was original and extracted from the Reserve bank of India website and respective banks’ annual reports.

Study of post-merger effect on performance of banks in India

Merger and Acquisition (M&A) is related with strategic management in the corporate world. M&A is used to satiate the hunger of growth and expansion of business houses and to increase the customer base. This study is focused on Post-Merger Performance Analysis of banks and provides a model which exhibits proper Merger and Acquisition Analysis. The model can be used for analysis of future mergers and acquisitions of Indian banks. Qualitative Research Methodology is performed in this study using SWOT Analysis. Based on the qualitative analyses, this paper concludes that the mergers of banks are successful and beneficial for the new amalgamated entity as well as to the shareholders and customers.

Bank group-wise comparison of loan recovery performance of commercial banks in India

Bank group-wise comparison of loan recovery performance of commercial banks in India

Mogućnost primene i prednosti bankoosiguranja - evidencija tržišta banaka i osiguranja u Bosni i Hercegovini

Bancassurance is a term used to describe a partnership or relationship between a bank and an insurance company, where the insurance company uses a banking sales channel to sell insurance products. The implementation of banking insurance activities in the financial system contributes to the strengthening of the competitive environment, the development of new insurance products, and greater satisfaction of customer needs. The main goal of this research is to point out the importance and significance of the application of bank insurance for both financial institutions, through the analysis of financial performance indicators of both banks and insurance companies, through the aspect of income and expenses. Also, this research presents an econometric analysis that tests the impact of other income, profit/loss growth rate, as well as the cost-income ratio as independent variables and their impact on the dependent variable, i.e., return on assets of banks in Bosnia and Herzegovina. The results of the econometric analysis showed that other revenues have the greatest impact on the profitability of banks in B&H. The weakest impact on bank profitability has a cost-to-earnings ratio.

Analysis of the relationship between countercyclical capital buffer and performance and risk indicators of the banking sector

This study aims to explain the association between the quarterly data obtained over the period 2007: Q2–2020: Q3 for Turkey and the countercyclical capital buffer (CCyB) proposed within the framework of Basel III with banking performance and risk indicators. For this purpose the association among the variables was analyzed using the ARDL model and by performing the Toda Yamamoto (T-Y) causality test. According to the analysis results, it was determined that the CCyB has a statistically significant and positive relationship with the capital adequacy indicators of the banks in the long-run, however, it has a statistically significant and negative relationship with the asset quality risk and currency risk indicators. In the short-run it was determined that the CCyB has a statistically significant and positive relationship with the capital adequacy, profitability and liquidity indicators and similar to the long-term relationship, it has a statistically significant and negative relationship with the asset quality risk and exchange rate risk indicators. According to the causality test results, a statistically significant and unilateral causality running from the indicators of capital adequacy, asset quality and exchange rate risk to the CCyB was detected. The obtained estimation results indicate that the CCyB can be increased by policymakers during the periods when the performance indicators of the banking sector rise, whereas can be decreased by policymakers during the periods when the risk indicators of the sector rise. Furthermore, the results of the study asserted that the CCyB was an appropriate instrument for mitigating the macroeconomic and systemic risks for Turkey.

Corporate Social Responsibility and Financial Performance of Indian Banks: Panel Data Analysis

Corporate Social Responsibility and Financial Performance of Indian Banks: Panel Data Analysis

Analysis of Financial Performance of Public Sector Banks in India: CAMEL

Public sector banks have been merged by the government in the last few years. This is the rationale behind conducting this study. The purpose of this article is to determine the factors affecting the performance of public sector banks in India and the interrelationship between bank-specific determinants and performance of public sector banks. In this article, we shall analyse the financial data of all the public sector commercial banks for a period spread across 11 years (2009–2019); Capital adequacy, Assets quality, Management efficiency, Earning, and Liquidity (CAMEL) has been used as a performance determinant; system generalised method of moments (GMM) analysis has been used to find the effect of determinants on the performance measurement of public sector banks; and CCA (canonical correlation analysis) has been used to find the interrelationship between the bank-specific determinants and the performance of public sector banks. The finding has important implications in terms of performance in the banking sector. Certain limitations of this study are: It is based on secondary data. The study only covers the financial aspects and not the non-financial aspects. It is found that the asset quality is negatively related with performance of public sector banks. Liquidity and inflation are inversely related to performance of public sector banks in India. Capital adequacy is positively related with banks’ performance, but inversely related with banks’ interest margin. GDP growth has a significant positive impact on banks’ performance, but inversely related with banks’ interest income. Inflation rate is inversely related with banks’ performance. Banking sector reforms are insignificantly related with banks’ performance.

A developing country's commercial banking risk governance disclosures: Post‐financial crisis

AbstractRisk governance disclosures (RGDs) provide users with valuable information and greater corporate insights about the management, oversight and strategic direction of the organisation. However, insufficient research has been conducted in this area. RGDs reduce information asymmetry and increase transparency. This study examines the level of RGDs in the commercial banks (CBs) of a developing country where most RGDs are voluntary and made at management's discretion. The study adopted a quantitative, multi‐method approach. RGDs for two publicly listed CBs in Barbados were analysed over 10 years (2007–2016) using a risk governance disclosure index (RGDI). Correlations were also used to determine if a relationship existed between the disclosures and performance. Disclosures were found to be general and non‐standardized. Company‐specific disclosures were infrequent, and annual disclosures were repetitive and symbolic. No significant relationships were discovered between corporate governance disclosures and performance. However, but bank performance indicators were found to be positively related to risk disclosures. A limitation of the study is that only two of the six CBs reported in a manner suitable for this study. Hence, reducing the number of observations. This was overcome through the use of a longitudinal approach which allowed for improved understanding of RG reporting practices in this sector. The results provide valuable insights which supplement the existing literature. They also provide pertinent information for standard‐setters, regulators and preparers of the reports. The study contributes to the existing literature in that it examines the disclosure behaviours of CBs in a non‐traditional governance model in an economy with limited research.

ANALISIS PENGARUH PROFIL RISIKO DAN RENTABILITAS TERHADAP PERMODALAN SERTA DAMPAKNYA PADA KINERJA BPR KONVENSIONAL DI PROVINSI BANTEN PERIODE 2014 – 2018

The purpose of this study was to determine the effect of the Risk Profile and Profitability on Capital and its impact on BPR Performance in Banten Province. This research data uses secondary data published by the Financial Services Authority (OJK) for the 2014-2018 period, namely the financial statements of 15 BPRs domiciled in Banten Province with the criteria of having total assets above 30 billion. The indicators of this research are the Risk Profile which is proxied by: Non Performing Loans, Loan to Deposit Ratio, Cash Ratio, and Earning Asset Quality, Profitability Indicators which are proxied by Operational Costs, Operational Income, Capital Indicators which are proxied by Capital Adequacy Ratio and Rural Bank Performance Indicators. which is proxied by Return On Asset. The method used is a quantitative method. The data analysis technique used a panel data regression model, and hypothesis testing with the Eviews program and continued with path analysis. The results showed that partially CR has a significant effect on CAR while NPL, LDR, KAP and BOPO have no significant effect on CAR. Simultaneously, NPL, LDR, CR, KAP and BOPO have a significant effect on CAR. Partially NPL, KAP and BOPO have a significant effect on ROA while LDR, CR and CAR have no significant effect on ROA, simultaneously NPL, LDR, CR, KAP, BOPO and CAR have a significant effect on ROA.