THE EFFECT OF CREDIT RISK AND CAPITAL ADEQUACY RATIO UPON RETURN ON ASSET (A Case Study at Banking Listed in Indonesia Stock Exchange)

Abstract

The aim of study to examine the effect of credit risk as measured by non performing loan, and capital adequacy ratio to profitability level measured by return on assets in banking companies listed in Indonesia Stock Exchange (IDX). This research belongs to causative research. The population in this study is the stateowned banks listed on Indonesia Stock Exchange. The sample of this study is determined by purposive sampling method so that obtained four sample companies. The type of data used is secondary data obtained from www.idx.co.id. The analysis method used is multiple regression analysis, correlation, determination and partial test of hypothesis with t test and simultaneously with F test. Based on the results of multiple regression analysis with 5% significance level, the results of this study conclude: (1) non performing loan has a negative and significant influence on profitability in banking companies listed on Indonesia Stock Exchange (2) capital adequacy ratio positively affect profitability on banking industry listed on Indonesia Stock Exchange. So simultaneously and together it can be concluded that NPL and CAR have an effect on ROA.

Analysis the level of Efficiency of Sharia Commercial Bank and Sharia Business Unit in Indonesia with Data Envelopment Analysis Method

“…Asset (I2) is the bank's entire property, including cash, demand deposits with Bank Indonesia, placements with other banks, securities held, financing or credit, and fixed assets. According to (Hanafi, et al, 2007) assets are economic benefits to be received in the future or controlled by the bank due to a transaction or event (Anwar & Murwaningsar, 2017), there is a positive and significant influence between assets and the number of credits. With high asset value, the bank will improve the capital structure to warrant the risk of placement of productive assets, including credit/financing, to make a profit from the investment activities (Purwanto, 2011).…”

Effect of Risk Based Bank Rating on Financial Performance of Sharia Commercial Banks

“…In addition, in assessing capital adequacy, the Bank must also link capital adequacy with bank risk profiles. Anwar & Murwaningsari (2017), and Olaruntoba et al (2018) show that CAR has a positive impact on profitability.…”

THE ANALYSIS OF THE EFFECTS OF CAPITAL ADEQUACY RATIO, OPERATIONAL COST COMPARING TO THE OPERATIONAL REVENUE, NET INTEREST MARGIN, NON-PERFORMING LOAN AND LOAN TO DEPOSIT RATIO UPON THE RETURN ON EQUITY (Empirical Study of Company Banking registered in the List of BEI for the period of 2012-2015)

“…This research aims to describe the financial performance of the bank based on the output. Anwar, Y and Murwaningsari, E (2016), revealed that credit risk as measured by non-performing loan (NPL) has a significant influence on profitability in the banking industry listed on the Indonesia Stock Exchange (IDX).…”