Determinants of bank profitability: Empirical evidence from Republic of Indonesia state-owned banks

Abstract

The study involved Bank BUMN (State-Owned Enterprises). Analysis was done using data panel regression analysis with Random Effect Model. Our findings confirmed the following. Mode 1 on partial tests showed that CAR had a significant negative effect on ROA, NPL had a significant negative effect on ROA, FOREX had a significant negative effect on ROA, BIR had a significant positive effect on ROA, and SIZE had a significant positive effect on ROA. Simultaneous tests resulted in a significant effect with a coefficient of determination of 88.71%. Model 2 on partial tets showed that CAR had a significant positive effect on ROE, NPL had a significant negative effect on ROE, FOREX had a significant negative effect on ROE, BIR had a significant positive effect on ROE, and SIZE had an insignificant positive effect on ROE. Simultaneous tests resulted in a significant effect with a coefficient of determination of 76.04%.