Modeling the profitability of commercial banks in Indonesia
This study examines the effect of lending on Micro, Small and Medium Enterprises (MSMEs) on the profitability of commercial banks in Indonesia. The profitability is measured as Return-on-Assets (ROA) and Return-on-Equity (ROE). It covers the period of 2011 to 2014 using a panel data regression. It...
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| Format: | Article |
| Language: | English |
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Universitas Islam Indonesia
2016-10-01
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| Series: | Economic Journal of Emerging Markets |
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| Online Access: | https://103.220.113.119/JEP/article/view/6005 |
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| author | Tri Wulandari Lukytawati Anggraeni Trias Andati |
| author_facet | Tri Wulandari Lukytawati Anggraeni Trias Andati |
| author_sort | Tri Wulandari |
| collection | DOAJ |
| description |
This study examines the effect of lending on Micro, Small and Medium Enterprises (MSMEs) on the profitability of commercial banks in Indonesia. The profitability is measured as Return-on-Assets (ROA) and Return-on-Equity (ROE). It covers the period of 2011 to 2014 using a panel data regression. It finds that MSME loans have a positive impact on ROE. Other internal factors that significantly influence the profitability of banks are MSME’s NPL (non performing loan), the operational efficiency ratio (OER) and loan-to-deposit ratio (LDR), while external factors that significantly influence the profitability of banks are inflation, Gross Domestic Product (GDP) growth and the Bank Indonesia (BI) rate.
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| format | Article |
| id | doaj-art-bfb7d30920cf43e5b911fe1c06e0cbf0 |
| institution | OA Journals |
| issn | 2086-3128 2502-180X |
| language | English |
| publishDate | 2016-10-01 |
| publisher | Universitas Islam Indonesia |
| record_format | Article |
| series | Economic Journal of Emerging Markets |
| spelling | doaj-art-bfb7d30920cf43e5b911fe1c06e0cbf02025-08-20T02:31:38ZengUniversitas Islam IndonesiaEconomic Journal of Emerging Markets2086-31282502-180X2016-10-0182Modeling the profitability of commercial banks in IndonesiaTri Wulandari0Lukytawati Anggraeni1Trias Andati2Bogor agriculture universityBogor agriculture universityBogor agriculture university This study examines the effect of lending on Micro, Small and Medium Enterprises (MSMEs) on the profitability of commercial banks in Indonesia. The profitability is measured as Return-on-Assets (ROA) and Return-on-Equity (ROE). It covers the period of 2011 to 2014 using a panel data regression. It finds that MSME loans have a positive impact on ROE. Other internal factors that significantly influence the profitability of banks are MSME’s NPL (non performing loan), the operational efficiency ratio (OER) and loan-to-deposit ratio (LDR), while external factors that significantly influence the profitability of banks are inflation, Gross Domestic Product (GDP) growth and the Bank Indonesia (BI) rate. https://103.220.113.119/JEP/article/view/6005loanreturn on assetreturn on equitycommercial bank |
| spellingShingle | Tri Wulandari Lukytawati Anggraeni Trias Andati Modeling the profitability of commercial banks in Indonesia Economic Journal of Emerging Markets loan return on asset return on equity commercial bank |
| title | Modeling the profitability of commercial banks in Indonesia |
| title_full | Modeling the profitability of commercial banks in Indonesia |
| title_fullStr | Modeling the profitability of commercial banks in Indonesia |
| title_full_unstemmed | Modeling the profitability of commercial banks in Indonesia |
| title_short | Modeling the profitability of commercial banks in Indonesia |
| title_sort | modeling the profitability of commercial banks in indonesia |
| topic | loan return on asset return on equity commercial bank |
| url | https://103.220.113.119/JEP/article/view/6005 |
| work_keys_str_mv | AT triwulandari modelingtheprofitabilityofcommercialbanksinindonesia AT lukytawatianggraeni modelingtheprofitabilityofcommercialbanksinindonesia AT triasandati modelingtheprofitabilityofcommercialbanksinindonesia |