The Influence of Capital Adequacy Ratio and Non-Performing Loan on Profitability of Commercial Banks Listed on The Indonesia Stock Exchange in 2017-2019
The Influence of Capital Adequacy Ratio and Non-Performing Loan on Profitability of Commercial Banks Listed on The Indonesia Stock Exchange in 2017-2019
Author(s): Nathaniel Karel Djaya, Ika YanuartiSubject(s): Present Times (2010 - today), Financial Markets
Published by: Facultatea de Management, Academia de Studii Economice din Bucuresti
Keywords: Capital Adequacy Ratio; Non-Performing Loan; Return on Assets;
Summary/Abstract: This study has the purpose to analyze the influence of Capital Adequacy Ratio and Non-Performing Loan on profitability of Commercial Banks. The sample of this study consists of 26 Commercial Banks listed on the Indonesia Stock Exchange in 2017-2019. This research used Multiple Regression Analysis to analyze the data gathered from audited financial reports of those banks. The results showed that the Capital Adequacy Ratio and Non-Performing Loan simultaneously affect the Profitability, which means that if there is an increase in Capital Adequacy Ratio and Non-Performing Loan, then it will be followed by an increase in Return on Assets. However, if it`s tested partially then it is only Non-Performing Loans that affect the Return on Assets. The influence was negative and statistically significant. The Capital Adequacy Ratio had positive influence on Return on Assets but not statistically significant.
Journal: Business Excellence and Management
- Issue Year: 11/2021
- Issue No: 4
- Page Range: 80-94
- Page Count: 15
- Language: English