This study investigates the effect of income diversification on bank performance and risk for government owned banks in Indonesia. This study uses return on assets (ROA) for bank performance and standard deviation of return on assets (SDROA) for bank risk. Using a data set of government owned banks in Indonesia during the period 2012-2016, we find evidence that income diversification is positively related to bank performance (ROA). Income diversification is positively related to bank risk. We find that income diversification increases performance and also risk for government owned banks. Tujuan dalam penelitian ini adalah untuk mengetahui adanya pengaruh diversifikasi pendapatan terhadap kinerja dan risiko bank. Pengukuran pada penelitian ini menggunakan return on assets (ROA) untuk mengukur kinerja dan standar deviasi return on assets (SDROA) untuk mengukur risiko bank. Penelitian ini menggunakan sampel bank milik pemerintah selama periode 2012-2016. Penelitian ini menunjukkan hasil bahwa terdapat pengaruh positif signifikan diversifikasi pendapatan terhadap kinerja bank. Implementasi strategi diversifikasi pendapatan juga berpengaruh positif signifikan terhadap risiko bank. Penelitian ini menunjukkan bahwa diversifikasi pendapatan tidak hanya meningkatkan kinerja namun juga risiko bank milik pemerintah.
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