Bank profitability is influenced by capital strength, credit risk, and the integration of sustainability practices into business operations. This study examines the effects of Capital Adequacy Ratio (CAR), Non-Performing Loan (NPL), and Green Banking on Return on Assets (ROA) among state-owned banks listed on the Indonesia Stock Exchange during 2019–2024. A quantitative associative approach was applied using secondary data from annual financial statements and sustainability reports. The sample consisted of four state-owned banks Bank Mandiri, Bank Rakyat Indonesia, Bank Negara Indonesia, and Bank Tabungan Negara observed over six years, resulting in 24 panel-data observations selected through purposive sampling. Data were analyzed using panel regression with EViews 12, and the Fixed Effect Model was selected based on model-selection tests. The results indicate that CAR has a positive and statistically significant effect on ROA, while NPL has a negative and statistically significant effect. Green Banking has a positive but statistically insignificant partial effect on ROA. Simultaneously, CAR, NPL, and Green Banking significantly explain variations in ROA, with the model reporting an R-squared of 0.7479. These findings suggest that capital management and credit-risk control are important for bank profitability, while the financial benefits of Green Banking may require a longer period to materialize. The study provides considerations for bank management, investors, and regulators in balancing financial performance with sustainability commitments.
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Fadilah et al. (2026) studied this question.
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