Factors Affecting the Financial Performance of Commercial Banks in Indonesia
Rini Kurniawati, Ikaputera Waspada

Universitas Pendidikan Indonesia

Abstract

ABSTRACT

Banking plays an important role to drive the wheels of the economy and national development, so it can be said that banking is the artery of the financial system. As a business entity engaged in financial services, trust of all parties, especially customers is very important because with good performance banks will easily gain the trust of the customers. The purpose of this research is to know the influence of Capital Adequacy Ratio (CAR) factor , Operating Efficiency Ratio (OER) or BOPO (Operational Cost and Operating Income), Net Interest Margin (NIM), Loan to Deposit Ratio ( LDR ) and Non Performing Loan (NPL) on the financial performance of banks as measured by Return On Assets (ROA).
The object of this study are commercial banks listed on the Indonesia Stock Exchange (IDX) period 2013-2017. Data collection techniques used by purposive sampling, then a decent sample used as many as 35 banks in accordance with the criteria that have been selected. The results showed that Capital Adequacy Ratio (CAR), Net Interest Margin (NIM), Loan to Deposit Ratio ( LDR ) have positive influence on Return On Assets (ROA) while Operating Efficiency Ratio (OER) or BOPO (Operating Cost and Operating Income) and Non Performing Loan (NPL) has a negative effect on Return On Assets (ROA).

Keywords: Banking, Financial Ratios, Financial Performance.

Topic: Financial Management and Accounting