August 30, 2024Open Access

Factors Affecting Profitability (Study On State-Owned Banks In Indonesia)

APAndry PrihartaUniversitas Muhammadiyah Jakarta NGNur Asni GaniUniversitas Muhammadiyah Jakarta SHSiti Hafnidar HarunUniversitas Muhammadiyah Jakarta

Key Points

Profitability, measured by ROA, is significantly impacted by capital adequacy ratio, non-performing loans, loan to deposit ratio, and net interest margin.
Multiple linear regression analysis from 2011 to 2022 demonstrates that CAR and NPL negatively affect profitability, while LDR and NIM positively influence it.
This quantitative research uses secondary financial data from four Indonesian state-owned banks, providing a comprehensive view of their financial health and challenges. The model explains 84.90% of the profitability variation based on these factors, indicating strong predictive power.

Abstract

The research aims to determine the effect of Capital Adequacy Ratio, Non-Performing Loans, Loan to Deposit Ratio and Net Interest Margin on profitability as measured by ROA. The study was conducted at banks owned by the Government of the Republic of Indonesia or known as Bank BUMN (State-Owned Enterprises) which consists of four banks, namely Bank Mandiri (Bank Mandiri), Bank Rakyat Indonesia (BRI), Bank Negara Indonesia (BNI) and Bank Tabungan Negara (BTN). The method of the research was quantitative research, analysis secondary data. It was conducted from the financial reporting Bank BUMN period from 2011 to 2022. By multiple linear regression analysis, it was found that CAR has a significant negative effect, NPL has a significant negative effect, LDR has a significant positive effect, and NIM has a significant positive effect on profitability. Furthermore, the coefficient of determination shows that the model is able to explain 84.90% of the variation in the four dependent variables.

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