Investment and Revenue as Determinants of Profitability for Indonesian Banking Companies (2020–2024)

This study examines the effects of investment and income on the profitability of banking companies in Indonesia during 2020–2024. The research uses a quantitative explanatory design and secondary data from audited annual financial reports. From the banking population used in the thesis, 15 companies were selected through purposive sampling, producing 75 bank-year observations. Investment is measured as total investment relative to total assets, income is represented by the sum of interest and non-interest income, and profitability is proxied by return on assets. The data were analyzed using multiple linear regression in SPSS 26 after tests of normality, multicollinearity, autocorrelation, and heteroskedasticity. The results show that investment has a positive and statistically significant effect on profitability (B = 2.115, β = 0.249, t = 2.416, p = 0.018). Income also has a positive and statistically significant effect (B = 0.115, β = 0.413, t = 4.003, p < 0.001). Jointly, investment and income significantly explain variation in profitability (F = 11.072, p < 0.001). The model has R² = 0.235 and adjusted R² = 0.214, indicating that 23.5% of the observed variation in profitability is explained by the two predictors. These findings suggest that productive asset allocation and revenue generation are relevant to bank profitability, while substantial variation remains attributable to other bank-specific and macroeconomic factors.