Title:
The Effect of GCG, Credit Risk, Size and Liquidity Risk on the Performance of National Foreign Exchange Commercial Banks in Indonesia

Authors:
Inneke Octaviani, Abdul Mongid, Indonesia

Abstract:

The Covid-19 pandemic, which had an impact on financial performance of business sectors, including the performance of banks in Indonesia. The pandemic has resulted an increase in bad loans due to the large number of debtors who failed to pay their obligations. This study aims to investigate the effect of GCG, credit risk, size, and liquidity risk on the performance of national foreign exchange private commercial banks in Indonesia. The research covers 25 foreign exchange national private public banks in Indonesia. The data source is from the annual reports of each bank from 2017 to 2021. The analytical test used in this study is multiple linear regression. The results of the study show that Good Corporate Governance and size have a positive effect on bank performance. As expected, credit risk has a negative effect on bank performance. Meanwhile, liquidity risk has no effect on bank performance. The implication in this research is that Good Corporate Governance is an important thing in the banking as it increases the transparency and accountability. In the aspect of credit risk, proper mitigation must be carried out so that credit risk can be handled appropriately.

DOI: https://doi.org/10.51505/IJEBMR.2023.7110