Accounting and Management Journal
Vol 6 No 2 (2022): Accounting and Management Journal

Investigating Banking Profitability: Evidence from Commercial Banks in Emerging Country

Firly Irhamni (Universitas Nahdlatul Ulama Surabaya)



Article Info

Publish Date
08 Dec 2022

Abstract

We empirically analyse the determinants of commercial banking profitability in Indonesia for the period 2014-2018. We contribute to the growing literature in practical ways, first we propose suggestion to the business of the commercial banking sector in Indonesia, especially in decision-making of financial condition, in order to maximize the performance of the company and shareholders, so that the banking company's shares can continue to survive and have large returns. Also, it is expected to provide insight and knowledge about the extent to which the relationship between the banking sound’s level variable and its Profitability. The sample in this study amounted to 17 banking companies. This study uses purposive sampling method and we apply multiple linear regression approach with SPSS. We found that credit portfolio quality has a negative and significant effect on profitability, bank solvency has a positive and significant effect on profitability, interest level has a positive and insignificant effect on profitability. Efficiency ratio has a negative and insignificant effect on profitability, and liquidity has a positive and insignificant effect on profitability. Keywords: bank profitability, emerging economy, credit quality, solvency, interest margin, efficiency

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Journal Info

Abbrev

AMJ

Publisher

Subject

Decision Sciences, Operations Research & Management

Description

Accounting and Management Journal is a scientific peer-reviewed journal published by Faculty of Economics and Business, Universitas Nahdlatul Ulama Surabaya, Indonesia. Since Established in 2017, AMJ is intended Provide a medium for dissemination of original and quality research on various topic in ...