Journal of Accounting and Investment
Vol 23, No 3: September 2022

Determinants of Banking Profitability: The Case of State-Owned Banks Listed on the Indonesia Stock Exchange

Imam Muhtadin (Department of Management, Faculty of Economics and Business, Universitas Muhammadiyah Jakarta, Jakarta Capital Special Region)
Faris Rahman Zain (Department of Management, Faculty of Economics and Business, Universitas Muhammadiyah Jakarta, Jakarta Capital Special Region)
Edi Purwanto (Universitas Terbuka, South Tangerang, Banten)
Tiyas Puji Utami (Department of Accounting, Faculty of Economics and Business, Universitas Muhammadiyah Yogyakarta, Special Region of Yogyakarta)



Article Info

Publish Date
30 Sep 2022

Abstract

Research aims: This study examined the determinants of profitability of state-owned banking companies on the Indonesia Stock Exchange, including Adequacy Ratio (CAR), Operating Costs and Operating Income (OCOI), Loan to Deposit Ratio (LDR), and Non-Performing Loan (NPL).Design/Methodology/Approach: This study is quantitative research with a type of exploratory. The population in this study was all state-owned banks listed on the Indonesia Stock Exchange for the period 2012-2018 and used the saturated sample technique, or the entire population was taken as a sample. The data analysis method employed in this study was a panel data regression model (a combination of time series and cross section) utilizing the EViews 9.Research findings: The results in this study revealed that the CAR and OCOI had a negative effect on bank profitability as proxied by ROA. Meanwhile, LDR and NPL did not affect the profitability of state-owned banks.Theoretical contribution/Originality: The research contributes to the literature and practice. Practically, these results can be used for management to maintain the banking system's internal condition in pursuing profitability.

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Journal Info

Abbrev

ai

Publisher

Subject

Economics, Econometrics & Finance

Description

JAI receives rigorous articles that have not been offered for publication elsewhere. JAI focuses on the issue related to accounting and investments that are relevant for the development of theory and practices of accounting in Indonesia and southeast asia especially. Therefore, JAI accepts the ...