The Effect of NPL, LDR, CAR, NIM, and BOPO on Profitability

Profitability, as reflected through An important metric for assessing Return on assets, or ROA, measures a bank's ability to efficiently and successfully manage its assets. Investigating the effects of the Capital Adequacy Ratio (CAR), Non-Performing Loan (NPL), Loan to Deposit Ratio (LDR), Net Interest Margin (NIM), and Operating Expenses to Operating Income (BOPO) on Return on Asset (ROA) is the goal of this study. An example of 31 conventional banks was chosen by simple random selection, and the research population consists of 34 banks that were listed between 2021 and 2023 on the IDX. The main tool for examining the relationship between variables in this study is multiple linear regression, which is the analytical technique employed. The study found a significant negative correlation between ROA and BOPO and NPL. In the meanwhile, ROA is greatly enhanced by LDR and NIM. On the other hand, ROA is not greatly impacted by CAR. Conclusions drawn from this research enhance the understanding of elements influencing bank ROA and support bank managers in formulating effective decisions