Loan Loss Reserves (LLR), Expected Loss (EL), and Value at Risks (VaR)

Isa, Mohd Yaziz Bin Mohd; Choong, Yap Voon; Fie, David Yong Gun; Rashid, Md. Zabid Hj Abdul

doi:10.17265/1548-6583/2015.04.004

Cited by 1 publication

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“…Loan loss reserve is a prudential regulation and supervisory concept against a bank to ensure that banks establish LLP (loan loss provisions) at a rate equivalent to the level of risk in their loan portfolio (Isa et al, 2015). Loan loss provisions represent funds derived from a portion of bank cash or cash equivalents and are set aside to cover potential loss estimates in the loan portfolio.…”

Section: Determinants Of Capital Adequacy Ratio On Banking Industry: mentioning

confidence: 99%

Determinants of capital adequacy ratio on banking industry: Evidence in Indonesia Stock Exchange

Usman

Lestari

Puspa

2019

Jurnal Keuangan Dan Perbankan

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Capital adequacy ratio (CAR) is an important indicator of bank safety sustainability. Banks that can guarantee CAR means the bank has the power to resist the financial crisis, protecting the bank itself and funds from depositors. This study aimed to determine the factors that affect the CAR. The sample used in this study is the banking industry listed on the Indonesia Stock Exchange (IDX) from 2007 until 2018. Independent variables are bank size, leverage, loan loss reserves, net interest margin, loan assets ratio, and liquidity. The dependent variable is CAR. The number of samples is 27 conventional banks by using purposive sampling. By using panel data regression analysis by estimating ordinary General Least Squares (GLS) method. The results of this study indicate that bank size, leverage, loan loss reserve, net interest margin, and loan asset ratio has an effect on CAR significantly while liquidity has no effect on CAR. The results of this study are expected to be used as a reference for bank managers and investors in looking at the factors that affect the CAR in the banking industry. AbstrakRasio kecukupan modal (CAR) merupakan indikator penting untuk keberlanjutan keselamatan bank. Bank yang dapat menjamin CAR berarti bank memiliki kekuatan untuk melawan krisis keuangan, melindungi bank itu sendiri dan dana dari deposan. Penelitian ini bertujuan untuk mengetahui faktor-faktor yang memengaruhi CAR. Sampel yang digunakan dalam penelitian ini adalah industri perbankan yang terdaftar di Bursa Efek Indonesia (BEI) dari tahun [2007][2008][2009][2010][2011][2012][2013][2014][2015][2016][2017][2018]. Variabel independen adalah ukuran bank, leverage, cadangan kerugian pinjaman, margin bunga bersih, rasio aset pinjaman, dan likuiditas. Variabel dependen adalah CAR. Jumlah sampel adalah 27 bank konvensional dengan menggunakan purposive sampling. Dengan menggunakan analisis regresi data panel dengan metode pendekatan General Least Square (GLS). Hasil penelitian ini menunjukkan bahwa ukuran bank, leverage, cadangan kerugian pinjaman, marjin bunga bersih, rasio aset pinjaman berpengaruh signifikan terhadap CAR sedangkan likuiditas tidak berpengaruh terhadap CAR. Hasil penelitian ini diharapkan dapat digunakan sebagai referensi bagi manajer bank dan investor dalam melihat faktor-faktor yang memengaruhi CAR di industri perbankan.

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Section: Determinants Of Capital Adequacy Ratio On Banking Industry: mentioning

confidence: 99%