Impact of Liquidity, Ownership, Global Financial Crisis, and Capital Adequacy Ratio on Indonesian Banking Profitability Period 2007-2016

Authors

  • Agustinus Winoto Bina Nusantara University
  • Yosman Bustaman Swiss German University

DOI:

https://doi.org/10.21512/tw.v21i1.6012

Keywords:

liquidity, ownership, global financial crisis, profitability, Indonesian banking

Abstract

The purpose of the research was to analyse the effect of liquidity, ownership, and global financial crisis on Indonesian Banking profitability. The research focused on conventional bank exclude sharia-bank and rural bank/BPR, owned by foreign-party, local-party or mixed-party, period 2007 to 2016. Data were retrieved from Indonesia Bank regulator which is Otoritas Jasa Keuangan’s website. For liquidity, liquidity ratio, loan to funding ratio, and cash ratio were used. Meanwhile ownership and global financial crisis used dummy variable. The research divided bank to foreign and mixed party, and local bank in the years of crisis that were 2008 and 2009. Ordinary Least Square method were used with Net Interest Margin as dependent variable, a control variable, and capital adequacy ratio. The result finds that there is no significant connection between liquidity and ownership on profitability, while crisis has significant connection on profitability.

 

Dimensions

Plum Analytics

References

Abraham. (2013). Foreign ownership and bank performances metrics in Saudi Arabia. International Journal of Islamic and Middle Eastern Finance and Management, 6(1), 43-50.

Aymen, B. M. (2014). Impact of ownership structure on financial performances of banks: Case of Tunisia. Journal of Applied Finance & Banking, 4(2), 1 - 11.

Chen, Y-K., Shen, C-H., Kao, L. and Yeh, C-Y. (2018). Bank liquidity risk and performances. Review of Pacific Basin Financial Markets and Policies, 21(1), 1-40. https://doi.org/10.1142/S0219091518500078

Ghosh, S. (2015). Macroprudential regulation and bank peformances: Does ownership matter? Journal of Banking Regulation, 16(1), 22-36.

Gujarati, D. N. (2004). Basic Economics. New Delhi: Tata McGraw Hill.

Hartwell, C. (2015). Après le déluge: Institution, the global financial crisis, and bank profitability in transition. Springer, 26(3), 497-524.

Kramaric, T. P., Cipcic, M. L. and Miletic, M. (2017). Has the financial crisis affected profitability of banks in Croatia. Journal of Applied Finance & Banking, 7(2).

Makaombohe, Y. N., Ilat, V and Sabijono, H. (2015). Rasio likuiditas dan jumlah kredit terhadap profitabilitas perbankan di Bursa Efek Indonesia. Jurnal Riset Ekonomi, Manajemen, Bisnis dan Akuntansi, 2(1), 617-626. https://doi.org/10.35794/emba.v2i1.4376

Rengasamy, D. (2014). Impact of Loan Deposit Ratio (LDR) on profitability: Panel evidence from commercial bank in Malaysia. Third International Conference on Global Business, Economics, Social Sciences. Mumbai, India (December 2014).

Tiwary, M. K. and Thampy, A. (2015). Bank ownership, credit and local economic growth. Journal of Finance, Accounting and Management, 6(2), 1-33.

Waleed, A., Pasha, A and Akhtar, A. (2016). Exploring The Impact of Liquidity on Profitability: Evidence From Banking Sector of Pakistan. Journal of Internet Banking and Commerce, 21(3), 1-12.

Widowati, S. A. (2014). Pengaruh rasio keuangan terhadap profitabilitas perbankan di Indonesia. Jurnal Penelitian Studi Manajemen & Organisasi, 3(2), 46-58.

Zaghdoudi, K. and Hakimi, A. (2017). The determinants of liquidity risk: Evidence from Tunisian bank. Journal of Applied Finance & Banking, 7(2), 71-81.

Downloads

Published

2020-03-16

How to Cite

Winoto, A., & Bustaman, Y. (2020). Impact of Liquidity, Ownership, Global Financial Crisis, and Capital Adequacy Ratio on Indonesian Banking Profitability Period 2007-2016. Journal The Winners, 21(1), 43-48. https://doi.org/10.21512/tw.v21i1.6012
Abstract 682  .
PDF downloaded 426  .