Indonesian Journal of Economics and Management
Vol 3 No 1 (2022): Indonesian Journal of Economics and Management (November 2022)

Assessing Banking Soundness of Infobank15 Index' Categories: The Impact of RGEC on Stock Return

Destri Alpiani (Department of Accounting, Politeknik Negeri Bandung, Bandung, Indonesia)
Radia Purbayati (Department of Accounting, Politeknik Negeri Bandung, Bandung, Indonesia)
Setiawan Setiawan (Department of Accounting, Politeknik Negeri Bandung, Bandung, Indonesia)
Darya Setia Nugraha (Department of Accounting, Politeknik Negeri Bandung, Bandung, Indonesia)



Article Info

Publish Date
30 Nov 2022

Abstract

Assessment of the soundness of a bank using the RGEC method (Risk Profile, Good Corporate Governance, Earnings, and Capital) shows the financial performance of a banking company for a certain period. With good performance, investors will be interested in investing in the company. This study aims to determine the effect of bank soundness on bank stock returns listed on the Indonesia Stock Exchange in the Infobank 15 Index category for the 2016-2021 period. With a purposive sampling method, 10 banks were obtained from a total population of 15. This study uses panel data multiple linear regression analysis using Eviews 12 software. The regression model chosen is the Common Effect Model (CEM). The results showed that partially Non-Performing Loans (NPL) had a significant negative effect on stock returns. Return on Assets (ROA), Net Interest Margin (NIM), and Capital Adequacy Ratio (CAR) have a significant positive effect, and Loan to Deposit Ratio (LDR) and Good Corporate Governance (GCG) have no significant effect on stock returns.

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Journal Info

Abbrev

ijem

Publisher

Subject

Decision Sciences, Operations Research & Management Economics, Econometrics & Finance

Description

Indonesian Journal of Economics and Management (IJEM) is a journal published by the Accounting Department of Politeknik Negeri Bandung, Indonesia. IJEM (Online ISSN: 2747-0695) published thrice a year (March, July, and November). The journal invites scholars, practitioners, and researchers to submit ...