Banking Company Profitability Based on the Influence of Non-Performing Loans and Capital Structure

DOI

10.2991/978-94-6463-622-2_2How to use a DOI?

Keywords

Debt to Assets Ratio; Debt to Equity Ratio; Non-performing Loan; Return on Assets

Abstract

The banking industry plays a very important role in improving people’s welfare and Indonesia’s economic growth. The value of Bank KBMI 4’s return on assets (ROA) appears to have fluctuated over the last six years. The 2020 COVID-19 pandemic had a significant impact. This research aims to partially and simultaneously analyze the influence of non-performing loans (NPL) and capital structure on the profitability of bank group companies based on Core Capital (KBMI) 4 on the Indonesia Stock Exchange for the 2017–2022 period. We project the company’s capital structure using the debt-to-assets ratio (DAR) and debt-to-equity ratio (DER) values, and we project its profitability using the return on assets (ROA) value. This research employed associative quantitative methods. The Indonesian Stock Exchange (BEI) uses the annual report from each banking company as a type of secondary data. The data collection method is documented. This study involved four banking companies listed in the KBMI 4 category on the BEI from 2017 to 2022. We used purposive sampling and included Bank Central Asia (BCA), Bank Negara Indonesia (BNI), Bank Rakyat Indonesia (BRI), and Bank Mandiri in the sample. This research uses data analysis techniques such as descriptive statistical analysis, classical assumption tests, and multiple linear regression analysis. We used the IBM SPSS Statistics 25 program to carry out all these techniques. The government can use the research’s results as a fundamental guide to set banking policies, and company management, investors, and other interested parties can use them to make investment decisions.

Copyright

© 2024 The Author(s)

Open Access

Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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TY  - CONF
AU  - Gede Santanu
AU  - Kadek Dian Jatiwardani
AU  - Ni Nyoman Supiatni
PY  - 2024
DA  - 2024/12/31
TI  - Banking Company Profitability Based on the Influence of Non-Performing Loans and Capital Structure
BT  - Proceedings of the International Conference on Sustainable Green Tourism Applied Science - Social Applied Science 2024 (ICoSTAS-SAS 2024)
PB  - Atlantis Press
SP  - 4
EP  - 11
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6463-622-2_2
DO  - 10.2991/978-94-6463-622-2_2
ID  - Santanu2024
ER  -