Jurnal Siasat Bisnis
Vol 24, No 1 (2020)

Revenue diversification and bank profitability: study on Indonesian banks

Muhammad Zaki Ashyari (Department of Management, Faculty of Economics & Business, Universitas Indonesia, Jakarta, Indonesia)
Rofikoh Rokhim (Department of Management, Faculty of Economics & Business, Universitas Indonesia, Jakarta, Indonesia)

Article Info

Publish Date
05 Mar 2020

Abstract

Bank has traditional activities that generate interest income, and non-traditional activities such as underwriting and trading securities, broker-agent, and investment banking, and other activities that generate non-interest income. This paper investigates traditional and non-traditional activities and the impact of revenue diversification on bank profitability. We use the data from the Indonesia banking industry 2007-2016 to measure the impact of revenue diversification, commission revenue, trading revenue, and other revenue on bank return on asset and return on equity. We find that revenue diversification increases bank profitability. However, all the non-interest income has a negative correlation on bank profitability.

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Journal Info
Jurnal Siasat Bisnis
Website

Abbrev

JSB

Publisher

Universitas Islam Indonesia

Subject

Decision Sciences, Operations Research & Management Social Sciences

Description

Jurnal Siasat Bisnis (JSB) is a peer review journal published twice a year (January and July) by Management Development Centre (MDC)-Department of Management, Faculty of Economics, Universitas Islam Indonesia. JSB) addresses the broad area of management science and its applications in industry and ...