Financial Efficiency Performance of Regional Development Bank (RDB) to Support Regional Economy in Indonesia

Permana, Yudistira Hendra; Andjani, Ike Yuli

doi:10.2139/ssrn.2500050

Cited by 3 publications

(3 citation statements)

References 7 publications

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“…Higher ratio of net interest margin tends to cause a decline in efficiency. This result supports finding of [25] in their financial efficiency case on RDB. The effect of bad loan, which represents the quality of bank assets, is opposing with common theories.…”

Section: Second Stage Analysissupporting

confidence: 87%

The Impact of Economic Turbulence on Local Bank Efficiency: Does Common Wisdom Hold?

Defung¹,

Yudaruddin²,

Hudayah³

2018

Proceedings of the Mulawarman International Conference on Economics and Business (MICEB 2017)

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Common theory suggests that banking performance is positively related to economic growth. This common wisdom in this paper is further tested by investigating whether economic turmoil has a meaningful impact on local bank technical efficiency. This study uses Regional Development Banks (RDB)data in Indonesia as a case study during 2005 to 2015. The analysis is conducted using two stage approaches in which Data Envelopment Analysis (DEA) is used in the first stage, whilst in the second stage pooled OLS regression is employed. The findings show that most of local banks are technically inefficient throughout the period of analysis. Furthermore, the results indicate that crisis tends to have a significant effect, while the rest of the variables show various level of magnitude on local bank efficiency.

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Section: Second Stage Analysissupporting

confidence: 87%

The Impact of Economic Turbulence on Local Bank Efficiency: Does Common Wisdom Hold?

Defung¹,

Yudaruddin²,

Hudayah³

2018

Proceedings of the Mulawarman International Conference on Economics and Business (MICEB 2017)

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“…There are 26 Local development banks throughout the Republic of Indonesia, although in recent years new provinces rose as the old provinces split but Local development banks still do not follow that process. Permana & Andjani (2014) attempt to analyse the connection between local development bank loan and financial efficiency with the regional GDP. Further, they categorize the local development bank based on the upper or lower economic classification in to three groups.…”

Section: Local Development Bankmentioning

confidence: 99%

Provincial corruption and local development bank performance

Murharsito

Fauziah

Kristijadi

et al. 2017

EJEM

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This paper investigates the effect of provincial corruption on the performance of local development bank, specifically to the profitability and credit quality. We use the data of 26 local development banks in 2012 and 2013. For the provincial corruption measurement we use "Public Institution Openness Index". Results of this study are first, corruption significantly has a negative effect on the profitability of local development bank. Second, corruption doesn't affect the credit quality of local development bank. These results are expected to enrich the within country corruption effect to the economic studies, particularly to the local development bank which is infrequently investigated. AbstrakTulisan ini mencoba untuk mengetahui pengaruh korupsi propinsi terhadap kinerja Bank Pembangunan Daerah, khusunya terhadap profitabilitas dan kualitas kredit. Kami menggunakan data dari 26 Bank Pembangunan daerah pada tahun 2012 dan 2013. Untuk pengukuran korupsi provinsi digunakan "Indeks Keterbukaan Institusi Publik". Hasil dari penelitian ini adalah pertama, korupsi secara signifikan memiliki efek negatif pada profitabilitas Bank Pembangunan Daerah. Kedua korupsi tidak mempengaruhi kualitas kredit Bank Pembangunan Daerah. Hasil penelitian ini diharapkan dapat memperkaya studi tentang korupsi tingkat dalam negara, khususnya terhadap Bank Pembangunan Daerah yang jarang diteliti.

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“…Although some of them have already gone public, the largest shares are still owned by the local government (Syarfira, 2018; Purwanti & Kalbuana, 2016;Hadad et al, 2003). This relationship certainly could provide a chance for SBU of RDBs to finance projects managed or controlled by the local government (Permana & Andjani, 2014;Lisdayanti, Daniel, & Anindita, 2013). Further, unlike other Islamic banks, a tight relation with the local government has provided a unique benefit for SBU to offer consumer financing for State Civil Apparatus (ASN) collateralized by monthly salary payment (Cahyadi, 2018;Maryana, 2010).…”

Section: Introductionmentioning

confidence: 99%

Financing profitability optimization: case study on sharia business unit of regional development banks in Indonesia

Jusni

Aswan

Syamsuddin

et al. 2019

Banks and Bank Systems

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The study aims to examine the financing profitability optimization as recorded by Sharia Business Unit of Regional Development Banks (RDBs) in Indonesia. The profitability measured by Net Operating Margin (NOM) and predicted variables were tested with the ratio of Operational Cost to Operational Income (BOPO), Non-Performing Financing (NPF) and Profit Sharing Financing (PSF). On the basis of the literature review conducted, the study proposed five path coefficients to impact NOM, of which the constructed direct path to NOM was three and two for indirect paths. Time series data used were obtained from annual reports and publication reports. Using Pearson Correlation and Path Analysis, the study has found that BOPO, PSF, and NPF contributed to impact to NOM directly, and PSF impacted NOM indirectly through BOPO. Interestingly, PSF recorded a negative impact on NOM, suggesting inefficiency matters faced by SBU of RDBs not contributed from PSF. Another interesting finding, NPF was found insignificant to BOPO, indicating loan default is not a major matter for inefficiency issue, but could be a tight financing policy.

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Financial Efficiency Performance of Regional Development Bank (RDB) to Support Regional Economy in Indonesia

Cited by 3 publications

References 7 publications

The Impact of Economic Turbulence on Local Bank Efficiency: Does Common Wisdom Hold?

The Impact of Economic Turbulence on Local Bank Efficiency: Does Common Wisdom Hold?

Provincial corruption and local development bank performance

Financing profitability optimization: case study on sharia business unit of regional development banks in Indonesia

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