Title:
DOES PANDEMIC COVID-19 AFFECT BANK PERFORMANCE? CASE STUDY ON CONVENTIONAL BANKS IN INDONESIA

Authors:
Slamet Ristanto, Sutrisno, Indonesia

Abstract:

Coronavirus disease 2019 (Covid-19) impacts not only health but also the global economy. As part of an economic system, banking is also affected. The purpose of this study is to analyze the impact of Covid-19 on the performance of banks listed on the Indonesia Stock Exchange. The bank's performance consists of non-performing loans (NPL), loan to deposit ratio (LDR), return on assets (ROA), return on equity (ROE), operating expenses and operating income (OEIR) and capital adequacy ratio (CAR). The population was 44 banks, but in this study 43 banks were taken because one data bank was outside the criteria (outlier). Data collection was carried out on a quarterly basis, namely the first, second and third quarters from 2017 to 2019 representing the period before the pandemic and the first, second and third quarters of 2020 representing the period during the pandemic. To test the hypothesis, the independent sample t-test was used. The results showed that NPL and OEIR had a significant effect, while LDR, ROA, ROE and CAR were not affected by the pandemic. This study also examines whether there are differences in the groups of large and small banks. The findings show that there are significant differences in NPL, LDR, ROE and CAR resulting in bear banks and small banks, while ROA and OEIR are not significantly different from the effects of the Covid-19 pandemic.