Citation:

Fitria Dwi Rohamana, Emanuel Kristijadi. "Determining Factors of Commercial Bank Profitability in Indonesia: Panel Data Regression" International Research Journal of Economics and Management Studies, Vol. 3, No. 2, pp. 9-16, 2024.

Abstract:

The purpose of this research is to analyze the influence of liquidity, asset quality, market sensitivity, and efficiency on profitability as measured using ROA. Liquidity is measured using the Loan Deposits Ratio (LDR) and Asset Liquid Ratio (ALR). Asset quality is measured by the ratio of Non-Performing Loans (NPL) and Non-Performing Assets (NPA). Market sensitivity is measured by the Interest Risk Ratio (IRR) and Net Open Position (NOP). Efficiency is measured by the Cost Income Ratio (CIR) and Fee-Based Income Ratio (FBIR). The sample in this research is 24 National Private Commercial Banks listed on the Indonesia Stock Exchange for 2018 to 2022, so the amount of data processed is 120. The type of research is causality research, and the analysis technique used is panel data regression analysis. The selection of the panel data regression model using the Chow Test and Hausman Test shows that the best model is the Random Effect Model. The conclusion of the research shows that ALR, IRR, and FBIR have a significant positive effect, while CIR has a significant negative effect. The LDR ratio has an insignificant positive effect, while the NPL, NPA, and NOP ratios have an insignificant negative effect on ROA.

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Keywords:

Profitability, Liquidity, Asset Quality, Market Sensitivity, Efficiency, Panel Data Regression.