COMMERCIAL BANKS’ PERFORMANCE AND CREDIT RISK IN INDONESIA
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Date
2020
Journal Title
Journal ISSN
Volume Title
Publisher
International Journal of Psychosocial Rehabilitation, Vol. 24, Issue 2
Abstract
This research aims to measure financial performance and its effect on the level of credit risk. Financial
performance used to predict credit risk consists of the level of capital adequacy measured through the Capital
Adequacy Ratio (CAR) and the amount of credit measured through a Loan to Deposit Ratio (LDR), while credit risk
is measured through the level of Non-Performing Loans (NPLs) . The research method uses descriptive and
verificative methods. The research was conducted on commercial banks listed on the IDX during the period of 2014-
2018. Observations were made on 35 commercial banks through the purposive sampling method. Data analysis
using panel data regression models by testing as required. The results showed that the Capital Adequacy Ratio
(CAR) has a significant effect on credit risk (NPLs), while the Loan to Deposit Ratio (LDR) has no significant effect
on credit risk (NPLs).
Description
Keywords
Capital Adequacy Ratio, Loan to Deposit Ratio, Non Performing Loans, Commercial Banks