INDICATORS OF BANK DEFAULT: EMPIRICAL STUDY OF RURAL BANKS IN INDONESIA
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Date
2021
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Widyatama University - WIBEST
Abstract
This study aims to know the indicators of Bank Default, empirical study of rural bank in Indonesia. The method used in this study uses logit. The data used are secondary data obtained from Bank publication reports during period 2014 - 2018. The population used in this study is rural banks in East Java and sample selection based on purposive sampling. The results found that rural banks need to pay attention to capital adequacy and non-performing loans. High non-performing loans can reduce bank profitability so that profits will also decrease. If this condition continues, it will erode capital. This research will be useful to find out indicators of bank soundness which are reflected in financial ratios to ensure the sustainability of bank business, especially rural banks by incorporating macroeconomic indicators.