Relationship between the Soundness of Banks and Profitability in Conventional Commercial Banks (Study of Banking Companies Listed on the Indonesia Stock Exchange (IDX) 2016-2018)


Authors : Elsa Mustika, SE; Dr. Rahmat Febrianto, SE, M.si, Ak, CA, Dra; Nini Syofriyeni, M.si, AK

Volume/Issue : Volume 4 - 2019, Issue 10 - October

Google Scholar : https://goo.gl/DF9R4u

Scribd : https://bit.ly/2NTruHJ

This study was conducted to determine the relationship between the level of bank soundness and profitability based on the risk based bank rating (RBBR) method. The independent variables studied were the level of bank soundness with the composition value and profitability, namely ROA (Return on Assets) and ROE (Return on Equity) on the dependent variable. The sample used is Bank BUKU 1 through Bank BUKU 4 in Indonesia during 2016 - 2018. The data technique used is multiple linear regression. The results of this study are the company's profitability for a healthier bank soundness is higher than the company's profitability for a lower bank soundness. That is, companies that have different levels of bank soundness quality, have different company profitability as well. The better the level of company health, the higher the company's profitability. Conversely, the worse the level of company health, the lower the company's profitability.

Keywords : Risk Based bank rating, Return on Assets, Return on Equity.

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Paper Submission Last Date
30 - November - 2021

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