IJEBMR
ISSN: 2456-7760

Title:
BANK SOUNDNESS ACCORDING TO 'RISK BASED BANK RATING' AND ITS PERFORMANCE IN INDONESI

Authors:
Sutrisno, Indonesia

Abstract:
In accordance with the Regulation of Bank Indonesia No. 13/1/PBI/2011, the soundness of the bank in Indonesia is assessed using a risk based bank rating consisting of a risk profile, good corporate governance, earnings and capital (RGEC).The purpose of this study is to examine the influence of risk profile, GCG, earnings and capital on bank performance. Bank performance was measured by ROA and risk profile consisting of credit risk measured by non-performing loan (NPL) and liquidity risk measured by loan to deposit ratio (LDR), GCG was measured by the value of self-assessment, earning was measured by operational efficiency ratio (OER)and capital was measured by capital adequacy ratio (CAR).The population in this study was conventional banks listed on the Indonesia Stock Exchange with the four years observation period (2014-2017). The analysis used was multiple regression with the help of SPSS version 21 data programming. The results of the study showed that credit risk (NPL) and capital (CAR) had no influence on bank performance, while liquidity risk (LDR) had a significant and positive influence on bank performance and OER had a significant but negative influence on bank performance. Good corporate governance (GCG) also had a significant and positive influence on bank performance.

PDF Download