Research Article
The Influence of Internal Factors on the Conventional Rural Banks Profitability in Indonesia Period 2015-2019
@INPROCEEDINGS{10.4108/eai.14-9-2020.2304898, author={Eka Dasra Viana and Budi Purwanto and I Gusti Ngurah Ary Budi Hartawan}, title={The Influence of Internal Factors on the Conventional Rural Banks Profitability in Indonesia Period 2015-2019}, proceedings={Proceedings of the 1st International Conference on Sustainable Management and Innovation, ICoSMI 2020, 14-16 September 2020, Bogor, West Java, Indonesia}, publisher={EAI}, proceedings_a={ICOSMI}, year={2021}, month={5}, keywords={conventional rural banks internal factors panel data regression profitability}, doi={10.4108/eai.14-9-2020.2304898} }- Eka Dasra Viana
Budi Purwanto
I Gusti Ngurah Ary Budi Hartawan
Year: 2021
The Influence of Internal Factors on the Conventional Rural Banks Profitability in Indonesia Period 2015-2019
ICOSMI
EAI
DOI: 10.4108/eai.14-9-2020.2304898
Abstract
During 2015-2019, the number of conventional rural banks in Indonesia decreased from 1637 to 1578. This was followed by a decrease in profitability ratios which were proxied by Return on Assets (ROA). The decrease of profitability potentially endanger the continuity of rural banks business. This study aims to analyze the effect of internal factors consisting of capital, liquidity, efficiency, credit risk, and total assets of conventional rural banks on ROA. The data used is secondary data in the form of the financial ratio of 320 conventional rural banks in Indonesia in 2015-2019. This study uses panel data regression as analysis tool. The panel data regression results show that size (total assets) has a significant positive effect on ROA. Meanwhile, Operational Efficiency Ratio (BOPO) and Non-Performing Loan (NPL) have a significant negative effect on ROA. Capital Adequacy Ratio (CAR) and Loan to deposits Ratio (LDR) have no significant effect on ROA.
