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Journal : Jurnal Riset Bisnis dan Manajemen

DETERMINANTS OF INDONESIAN BANKING PROFITABILITY Sholikha Oktavi Khalifaturofi'ah; Achmad Saiful Ulum
Jurnal Riset Bisnis dan Manajemen Vol 15 No 01 (2022): February Edition
Publisher : Faculty of Economic and Business, University of Pasundan

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.23969/jrbm.v15i01.5008

Abstract

This study aims to investigate determinants of Indonesian banking profitability. The determinants of banking profitability are bank specifics and macroeconomic indicators. This study uses balanced panel data involving 18 banks in Indonesia for the period 2009-2019. The research method used is panel regression method. Empirical findings indicate that bank specifics, such as bank liquidity and capital, have a positive and significant effect on banking profitability, while the cost-to-income ratio and leverage has a negative and significant effect on banking profitability. The results of this study have considerable implications for policy. The government needs to regulate inflation, exchange rates, and interest rates. The results of this study can help policy makers, governments, bankers, and bank managers to better understand the various determinants of bank profitability.