The Effect of Key Financial Indicators on Bank Profitability
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Keywords:
Capital Adequacy Ratio, Non-Performing Loans, Loan to Deposit Ratio, Firm Size, Profitability
Abstract
Banking companies experienced fluctuations in average profitability during the 2019-2023 period. This study aims to analyze the effects of Capital Adequacy Ratio (CAR), Non-Performing Loan (NPL), Loan to Deposit Ratio (LDR) and Firm Size on profitability. The research employs a quantitative method using secondary data collected from the Indonesia Stock Exchange and Bank Indonesia websites. The population of the study includes banking sub-sector companies listed on the Indonesia Stock Exchange from 2019 to 2023. The sample was selected using a purposive sampling technique, resulting in 20 companies as the sample. Hypothesis testing was conducted using multiple linear regression analysis with the assistance of the Statistical Package for the Social Sciences (SPSS) software. The findings reveal that the Capital Adequacy Ratio (CAR) and Firm Size (FS) have no effect on profitability, while Non-Performing Loan (NPL) and Loan to Deposit Ratio (LDR) significantly influence profitability.
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References
Abdurrohman, A., Fitrianingsih, D., Salam, A. F., & Putri, Y. (2020). Pengaruh Capital Adequacy Ratio (Car), Loan To Deposit Ratio (Ldr) Dan Non Performing Loan (Npl) Terhadap Return on Asset (Roa) Pada Sektor Perbankan Di Bursa Efek Indonesia. Jurnal Revenue : Jurnal Ilmiah Akuntansi, 1(1), 125–132. https://doi.org/10.46306/rev.v1i1.12
Adhim, C., & Mulyati, M. (2022). The Influence of Capital Adequacy Ratio ( CAR ), Non-Performing Loan ( NPL ), Loan to Deposit Ratio ( LDR ), and Operational Costs to Operating Income ( BOPO ) on Return on Asset ( ROA ) in Banks Listed on the Indonesia Stock Exchange Management Departeme. International Journal of Science, Technology & Management, 6(1), 22–41.
Amankwaah, E., & Baidoo, N. O. (2023). Effect of firm size and corruption on financial challenges of savings and loans companies: Evidence from Ghana. Social Sciences and Humanities Open, 8(1), 100552. https://doi.org/10.1016/j.ssaho.2023.100552
Andersen, H., & Juelsrud, R. E. (2024). Optimal capital adequacy ratios for banks. Latin American Journal of Central Banking, 5(2), 100107. https://doi.org/10.1016/j.latcb.2023.100107
Fan, W., Wang, F., Zhang, H., Yan, B., Ling, R., & Jiang, H. (2024). Is climate change fueling commercial banks’ non-performing loan ratio? Empirical evidence from 31 provinces in China. International Review of Economics and Finance, 96(PA), 103585. https://doi.org/10.1016/j.iref.2024.103585
Indriani, T., Wahyudi, C., & Hapsari, I. M. (2023). Pengaruh Dana Pihak Ketiga, Capital Adequacy Ratio, Loan To Deposito Ratio, dan Firm Size terhadap Profitabilitas. Konsentrasi: Jurnal Manajemen Dan Bisnis, 4(1), 10–20. https://doi.org/10.24905/konsentrasi.v4i1.44
Kahfi, M., & Oktaviani, R. F. (2024). Ecodig : Economics And Digital Business Journal Terhadap Struktur Modal ( Studi Empiris Pada Perusahaan Subsektor Makanan dan Minuman yang Terdaftar di Bursa Efek Indonesia Periode 2018-2022 ). Ecodig: Economics and Digital Business Journal, 1(1), 53–63.
Madugu, A. H., Ibrahim, M., & Amoah, J. O. (2020). Differential effects of credit risk and capital adequacy ratio on profitability of the domestic banking sector in Ghana. Transnational Corporations Review, 12(1), 37–52. https://doi.org/10.1080/19186444.2019.1704582
Mustafa, A. N., & Sulistyowati, E. (2022). Pengaruh Capital Adequacy Ratio, Non Performing Loan, Loan To Deposit Ratio, Dan Firm Size Terhadap Profitabilitas Bumn Sektor Perbankan. Jurnal Proaksi, 9(1), 84–96. https://doi.org/10.32534/jpk.v9i1.2511
Najhah, D., & Amin, M. A. N. (2024). Pengaruh Non Performing Loan, BOPO dan Firm Size Terhadap Profitabilitas. Konsentrasi: Jurnal Manajemen Dan Bisnis, 4(2), 80–95. https://doi.org/10.24905/konsentrasi.v4i2.56
Nur Rachmania, & Retno Fuji Oktaviani. (2024). Pengaruh Current Ratio, Total Asset Turnover, Return on Equity dan Net Profit Margin terhadap Pertumbuhan Laba. Jurnal Riset Manajemen, 2(3), 320–333. https://doi.org/10.54066/jurma.v2i3.2275
Oktaviani, R. F. (2024a). Understanding Young Entrepreneurs: Interest in Supporting Business Success. EKUITAS (Jurnal Ekonomi Dan Keuangan), 8(2), 288–303. https://doi.org/10.24034/j25485024.y2024.v8.i2.6324
Oktaviani, R. F. (2024b). Unpacking The Resistance of Traditional Market to Digital Payment: A Qualitatove Approach. Jurnal Aplikasi Ekonomi, Akuntansi Dan Bisnis, 6(2), 70–86. https://doi.org/doi.org/10.37641/riset.v6i2.2119
Oktaviani, R. F., & Meidiyustiani, R. (2025). Revealing Digital Literacy of Young Entrepreneurial Intentions : A Case of University Students in Indonesia. Pakistan Journal of Life and Social Sciences, 23(1), 448–458. https://doi.org/https://doi.org/10.57239/PJLSS-2025-23.1.0035
Pancotto, L., ap Gwilym, O., & Williams, J. (2024). The evolution and determinants of the non-performing loan burden in Italian banking. Pacific Basin Finance Journal, 84, 102306. https://doi.org/10.1016/j.pacfin.2024.102306
Paramita, P. K., & Dana, I. M. (2019). Pengaruh Capital Adequacy Ratio, Non Performing Loan, Dan Loan To Deposit Ratio Terhadap Profitabilitas. E-Jurnal Manajemen Universitas Udayana, 8(2), 673. https://doi.org/10.24843/ejmunud.2019.v08.i02.p04
Prasetyo, R. A., & Oktaviani, R. F. (2023). Pengaruh Return on Asset, Current Ratio, Debt To Equity Ratio, Net Profit Margin Terhadap Harga Saham Sub-Sektor Telekomunikasi. Jurnal Akuntansi, Keuangan, Perpajakan Dan Tata Kelola Perusahaan, 1(2), 274–284. https://doi.org/10.59407/jakpt.v1i2.207
Pratika, I., & Primasari, N. H. (2020). Analisis Pengaruh Capital Adequacy Ratio, Biaya Operasional dan Pendapatan Operasional, Loan to Deposit Ratio, dan Non Performing Loan Terhadap Profitabilitas (Studi Empiris Pada Bank Umum Swasta Nasional Devisa yang terdaftar di Bursa Efek Indonesia Peri. Jurnal Akuntansi Dan Keuangan, 9(2), 109–120.
Puspita, L. D. P., & Mustanda, I. K. (2019). Pengaruh Capital Adequacy Ratio, Loan To Deposit Ratio, Dan Non Performing Loan Terhadap Profitabilitas Lpd. E-Jurnal Manajemen Universitas Udayana, 8(7), 4017. https://doi.org/10.24843/ejmunud.2019.v08.i07.p01
Rahmawati, R. H., & Oktaviani, R. F. (2024). Analisis Kinerja Keuangan Menggunakan Metode Altman Z-Score terhadap Harga Saham. Glory : Global Leadership Organizational Research in Management, 2(4), 104–117.
Rismanty, V. A., & Suraya, A. (2023). Pengaruh Capital Adequacy Ratio (Car) Dan Loan To Deposit Ratio (Ldr) Terhadap Return on Assets (Roa) Pada Pt Bank Mandiri. SCIENTIFIC JOURNAL OF REFLECTION : Economic, Accounting, Management and Business, 6(2), 349–358. https://doi.org/10.37481/sjr.v6i2.658
Riyanto, A., Raspati, G., Rahayu, Y., & Yuniati, Y. (2021). Kinerja Keuangan Entitas Multifinance: Determinasi Non Performing Loan dan Capital Adequacy Ratio Terhadap Profitabilitas. Moneter - Jurnal Akuntansi Dan Keuangan, 8(2), 102–109. https://doi.org/10.31294/moneter.v8i2.10934
Rosa, F. W. G., & Murni, N. S. M. (2023). Analysis of the influence of size, capital adequacy ratio, loan to deposit ratio, non performing loan on the profitability of commercial Banks Registered at OJK. Enrichment : Journal of Management, 13(1), 107–115. https://doi.org/10.35335/enrichment.v13i1.1167
Setiawan, T. U. S. S. T. (2022). Capital Adequacy Ratio, Loan To Deposit Ratio Dan Non Performing Loan Terhadap Return On Equity Pada Perusahaan Perbankan. Inovatif: Jurnal Ekonomi, Manajemen, Akuntansi, Bisnis Digital Dan Kewirausahaan, Vol. 1 No. 1 (2022): JANUARI 2022, 1–15. https://journal.sinergicendikia.com/index.php/inov/article/view/6/21
Takahashi, F. L., & Vasconcelos, M. R. (2024). Bank efficiency and undesirable output: An analysis of non-performing loans in the Brazilian banking sector. Finance Research Letters, 59(October 2023), 1–10. https://doi.org/10.1016/j.frl.2023.104651
Wahyuni, E. S., Meidiyustiani, R., Oktaviani, R. F., & Laksmiwati, M. (2023). Determinan Leverage Dan Intangible Asset Terhadap Profitabilitas Dengan Komite Audit Sebagai Variabel Moderating. Jurnal Akuntansi, Keuangan, Perpajakan Dan Tata Kelola Perusahaan, 1(2), 224–231. https://doi.org/10.59407/jakpt.v1i2.203
Wolff, O. R., Murni, S., & Rate, P. Van. (2019). Analisis Pengaruh Firm Size, Loan To Deposit Ratio, Capital Adequacy Ratio, dan Non Performing Loan Terhadap Profitabilitas (Return On Asset) Bank Umum Swasta Nasional yang Terdaftar di BEI (2013-2017). Jurnal EMBA : Jurnal Riset Ekonomi, Manajemen, Bisnis Dan Akuntansi, 7(3), 3788–3797.
Adhim, C., & Mulyati, M. (2022). The Influence of Capital Adequacy Ratio ( CAR ), Non-Performing Loan ( NPL ), Loan to Deposit Ratio ( LDR ), and Operational Costs to Operating Income ( BOPO ) on Return on Asset ( ROA ) in Banks Listed on the Indonesia Stock Exchange Management Departeme. International Journal of Science, Technology & Management, 6(1), 22–41.
Amankwaah, E., & Baidoo, N. O. (2023). Effect of firm size and corruption on financial challenges of savings and loans companies: Evidence from Ghana. Social Sciences and Humanities Open, 8(1), 100552. https://doi.org/10.1016/j.ssaho.2023.100552
Andersen, H., & Juelsrud, R. E. (2024). Optimal capital adequacy ratios for banks. Latin American Journal of Central Banking, 5(2), 100107. https://doi.org/10.1016/j.latcb.2023.100107
Fan, W., Wang, F., Zhang, H., Yan, B., Ling, R., & Jiang, H. (2024). Is climate change fueling commercial banks’ non-performing loan ratio? Empirical evidence from 31 provinces in China. International Review of Economics and Finance, 96(PA), 103585. https://doi.org/10.1016/j.iref.2024.103585
Indriani, T., Wahyudi, C., & Hapsari, I. M. (2023). Pengaruh Dana Pihak Ketiga, Capital Adequacy Ratio, Loan To Deposito Ratio, dan Firm Size terhadap Profitabilitas. Konsentrasi: Jurnal Manajemen Dan Bisnis, 4(1), 10–20. https://doi.org/10.24905/konsentrasi.v4i1.44
Kahfi, M., & Oktaviani, R. F. (2024). Ecodig : Economics And Digital Business Journal Terhadap Struktur Modal ( Studi Empiris Pada Perusahaan Subsektor Makanan dan Minuman yang Terdaftar di Bursa Efek Indonesia Periode 2018-2022 ). Ecodig: Economics and Digital Business Journal, 1(1), 53–63.
Madugu, A. H., Ibrahim, M., & Amoah, J. O. (2020). Differential effects of credit risk and capital adequacy ratio on profitability of the domestic banking sector in Ghana. Transnational Corporations Review, 12(1), 37–52. https://doi.org/10.1080/19186444.2019.1704582
Mustafa, A. N., & Sulistyowati, E. (2022). Pengaruh Capital Adequacy Ratio, Non Performing Loan, Loan To Deposit Ratio, Dan Firm Size Terhadap Profitabilitas Bumn Sektor Perbankan. Jurnal Proaksi, 9(1), 84–96. https://doi.org/10.32534/jpk.v9i1.2511
Najhah, D., & Amin, M. A. N. (2024). Pengaruh Non Performing Loan, BOPO dan Firm Size Terhadap Profitabilitas. Konsentrasi: Jurnal Manajemen Dan Bisnis, 4(2), 80–95. https://doi.org/10.24905/konsentrasi.v4i2.56
Nur Rachmania, & Retno Fuji Oktaviani. (2024). Pengaruh Current Ratio, Total Asset Turnover, Return on Equity dan Net Profit Margin terhadap Pertumbuhan Laba. Jurnal Riset Manajemen, 2(3), 320–333. https://doi.org/10.54066/jurma.v2i3.2275
Oktaviani, R. F. (2024a). Understanding Young Entrepreneurs: Interest in Supporting Business Success. EKUITAS (Jurnal Ekonomi Dan Keuangan), 8(2), 288–303. https://doi.org/10.24034/j25485024.y2024.v8.i2.6324
Oktaviani, R. F. (2024b). Unpacking The Resistance of Traditional Market to Digital Payment: A Qualitatove Approach. Jurnal Aplikasi Ekonomi, Akuntansi Dan Bisnis, 6(2), 70–86. https://doi.org/doi.org/10.37641/riset.v6i2.2119
Oktaviani, R. F., & Meidiyustiani, R. (2025). Revealing Digital Literacy of Young Entrepreneurial Intentions : A Case of University Students in Indonesia. Pakistan Journal of Life and Social Sciences, 23(1), 448–458. https://doi.org/https://doi.org/10.57239/PJLSS-2025-23.1.0035
Pancotto, L., ap Gwilym, O., & Williams, J. (2024). The evolution and determinants of the non-performing loan burden in Italian banking. Pacific Basin Finance Journal, 84, 102306. https://doi.org/10.1016/j.pacfin.2024.102306
Paramita, P. K., & Dana, I. M. (2019). Pengaruh Capital Adequacy Ratio, Non Performing Loan, Dan Loan To Deposit Ratio Terhadap Profitabilitas. E-Jurnal Manajemen Universitas Udayana, 8(2), 673. https://doi.org/10.24843/ejmunud.2019.v08.i02.p04
Prasetyo, R. A., & Oktaviani, R. F. (2023). Pengaruh Return on Asset, Current Ratio, Debt To Equity Ratio, Net Profit Margin Terhadap Harga Saham Sub-Sektor Telekomunikasi. Jurnal Akuntansi, Keuangan, Perpajakan Dan Tata Kelola Perusahaan, 1(2), 274–284. https://doi.org/10.59407/jakpt.v1i2.207
Pratika, I., & Primasari, N. H. (2020). Analisis Pengaruh Capital Adequacy Ratio, Biaya Operasional dan Pendapatan Operasional, Loan to Deposit Ratio, dan Non Performing Loan Terhadap Profitabilitas (Studi Empiris Pada Bank Umum Swasta Nasional Devisa yang terdaftar di Bursa Efek Indonesia Peri. Jurnal Akuntansi Dan Keuangan, 9(2), 109–120.
Puspita, L. D. P., & Mustanda, I. K. (2019). Pengaruh Capital Adequacy Ratio, Loan To Deposit Ratio, Dan Non Performing Loan Terhadap Profitabilitas Lpd. E-Jurnal Manajemen Universitas Udayana, 8(7), 4017. https://doi.org/10.24843/ejmunud.2019.v08.i07.p01
Rahmawati, R. H., & Oktaviani, R. F. (2024). Analisis Kinerja Keuangan Menggunakan Metode Altman Z-Score terhadap Harga Saham. Glory : Global Leadership Organizational Research in Management, 2(4), 104–117.
Rismanty, V. A., & Suraya, A. (2023). Pengaruh Capital Adequacy Ratio (Car) Dan Loan To Deposit Ratio (Ldr) Terhadap Return on Assets (Roa) Pada Pt Bank Mandiri. SCIENTIFIC JOURNAL OF REFLECTION : Economic, Accounting, Management and Business, 6(2), 349–358. https://doi.org/10.37481/sjr.v6i2.658
Riyanto, A., Raspati, G., Rahayu, Y., & Yuniati, Y. (2021). Kinerja Keuangan Entitas Multifinance: Determinasi Non Performing Loan dan Capital Adequacy Ratio Terhadap Profitabilitas. Moneter - Jurnal Akuntansi Dan Keuangan, 8(2), 102–109. https://doi.org/10.31294/moneter.v8i2.10934
Rosa, F. W. G., & Murni, N. S. M. (2023). Analysis of the influence of size, capital adequacy ratio, loan to deposit ratio, non performing loan on the profitability of commercial Banks Registered at OJK. Enrichment : Journal of Management, 13(1), 107–115. https://doi.org/10.35335/enrichment.v13i1.1167
Setiawan, T. U. S. S. T. (2022). Capital Adequacy Ratio, Loan To Deposit Ratio Dan Non Performing Loan Terhadap Return On Equity Pada Perusahaan Perbankan. Inovatif: Jurnal Ekonomi, Manajemen, Akuntansi, Bisnis Digital Dan Kewirausahaan, Vol. 1 No. 1 (2022): JANUARI 2022, 1–15. https://journal.sinergicendikia.com/index.php/inov/article/view/6/21
Takahashi, F. L., & Vasconcelos, M. R. (2024). Bank efficiency and undesirable output: An analysis of non-performing loans in the Brazilian banking sector. Finance Research Letters, 59(October 2023), 1–10. https://doi.org/10.1016/j.frl.2023.104651
Wahyuni, E. S., Meidiyustiani, R., Oktaviani, R. F., & Laksmiwati, M. (2023). Determinan Leverage Dan Intangible Asset Terhadap Profitabilitas Dengan Komite Audit Sebagai Variabel Moderating. Jurnal Akuntansi, Keuangan, Perpajakan Dan Tata Kelola Perusahaan, 1(2), 224–231. https://doi.org/10.59407/jakpt.v1i2.203
Wolff, O. R., Murni, S., & Rate, P. Van. (2019). Analisis Pengaruh Firm Size, Loan To Deposit Ratio, Capital Adequacy Ratio, dan Non Performing Loan Terhadap Profitabilitas (Return On Asset) Bank Umum Swasta Nasional yang Terdaftar di BEI (2013-2017). Jurnal EMBA : Jurnal Riset Ekonomi, Manajemen, Bisnis Dan Akuntansi, 7(3), 3788–3797.
Published
2025-03-28
How to Cite
Mulyani, Rita, Retno Fuji Oktaviani, and Nurul Khansa Fauziyah. 2025. “The Effect of Key Financial Indicators on Bank Profitability”. Shafin: Sharia Finance and Accounting Journal 5 (1), 96-110. https://doi.org/10.19105/sfj.v5i1.18132.
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