scholarly journals Impact of internal and external factors on the net interest margin of banks in Indonesia

2020 ◽  
Vol 15 (4) ◽  
pp. 99-107
Author(s):  
Endri Endri ◽  
Asti Marlina ◽  
Hurriyaturrohman
Keyword(s):  
Exchange Rate ◽  
Financial Services ◽  
Commercial Banks ◽  
External Factors ◽  
Annual Reports ◽  
Macroeconomic Factors ◽  
Net Interest Margin ◽  
Internal And External Factors ◽  
The Impact ◽  
Interest Margin

This study aims to assess the impact of bank-specific factors and macroeconomic indicators on the net interest margin (NIM) of commercial banks in Indonesia. Data from Indonesian commercial banks are used. Data are collected from the banks’ annual reports and the Financial Services Authority (OJK) for the period 2008 to 2018. A panel data regression model is used to estimate the effect of bank-specific and macroeconomic factors. The results prove that the variables of Non-Performing Loans (NPL), Loan to Deposit Ratio (LDR), Return on Assets (ROA), Interest Rate (SBI), and Exchange Rate (FOREX) affect NIM. The exchange rate variable has a predominant effect, while the NPL factor has a less strong influence on NIM. The empirical evidence from this research is important for commercial banks in Indonesia to improve operational efficiency through NIM performance. Internal and external factors of a bank should be subject of attention of bank managers.

scholarly journals Analysis of the Impact of Interest Rate Liberalization on Financial Services Management in Chinese Commercial Banks

2020 ◽  
Vol 2020 ◽  
pp. 1-11
Author(s):  
Tian Meng ◽  
Mengnan Sun ◽  
Yixuan Zhao ◽  
Bo Zhu
Keyword(s):  
Interest Rate ◽  
Interest Rates ◽  
Financial Services ◽  
Commercial Banks ◽  
Two Dimensions ◽  
Interest Spreads ◽  
Net Interest Margin ◽  
Interest Margins ◽  
Marketization Reform ◽  
The Impact

With the advancement of China's interest rate marketization reform, commercial banks' net interest margin has narrowed. This paper selects 16 representative listed banks as the research object and conducts an empirical analysis from the two dimensions: profit level and profit structure. The study finds that the marketization of interest rates promoted the narrowing of net interest margins caused by the narrowing of net interest margins, and the profitability of commercial banks was suppressed. The narrowing of net interest spreads forced commercial banks to actively expand their intermediate business activities and adjust business structure correspondingly. The narrowing of net interest spreads has different impacts on the profitability of commercial banks of different sizes.

scholarly journals The Effect Of BCA, BRI And Bank Mandiri Performance On The Indonesia Composite Index

2020 ◽  
Vol 18 (1) ◽  
pp. 39
Author(s):  
Umi Latifah ◽  
Fazhar Sumantri
Keyword(s):  
Capital Market ◽  
Significant Relationship ◽  
Financial Services ◽  
Stock Price ◽  
Composite Index ◽  
Operational Efficiency ◽  
Efficiency Ratio ◽  
Net Interest Margin ◽  
The Impact ◽  
Interest Margin

The Indonesia Composite Index (ICI) serves as a tool to measure and compare stock price movements in the capital market. The purpose of the research is to analyze the impact of the Operational Efficiency, Net Interest Margin, and Non-Performing Loan Ratios on Bank BCA, BRI, and Bank Mandiri as independent variables. Data used in this research was taken from the Financial Services Authority. The result from the F test shows a significant relationship in Operational Efficiency, Net Interest Margin, and Non-Performing Loan on the Bank BCA, BRI, and Mandiri towards the Indonesia Composite Index. Meanwhile, the t-test shows a significant relationship between Non-Performing Loan on the Bank BCA, Net Interest Margin on the Bank BRI, and all variables on the Bank Mandiri to Indonesia Composite Index. Based on Adjusted R Square; Operational Efficiency Ratio, Net Interest Margin, and Non-Performing Loan towards to Indonesia Composite Index is 88% while the rest of it 12% were influenced by other factors

Financial performance of commercial banks in the emerging markets

2022 ◽  
Vol 5 (2, special issue) ◽  
pp. 244-257
Author(s):  
Wondmagegn Biru Mamo ◽  
Habtamu Legese Feyisa ◽  
Mekonnen Kumlachew Yitayaw
Keyword(s):  
Exchange Rate ◽  
Emerging Markets ◽  
Financial Performance ◽  
Commercial Banks ◽  
Banking Sector ◽  
Trade Openness ◽  
Exchange Rate Volatility ◽  
Internet Access ◽  
Net Interest Margin ◽  
The Impact

In the economic growth of a country, the banking sector plays a significant role (Alam, Rabbani, Tausif, & Abey, 2021). The overall objective of the study is to investigate the financial performance of commercial banks in emerging markets. The study tried to see the impact of governance, exchange rate volatility, trade openness, and internet access on the financial performance of commercial banks in Ethiopia during the years from 2014 to 2019. The study employed a random-effects model using balanced panel data. The result indicated that composite governance index, trade openness, and internet access have a positive and statistically significant effect on the financial performance of commercial banks as measured by their return on assets. However, the exchange rate volatility has a negative and statistically significant effect on the financial performance of commercial banks. On the other hand, the result of bank-specific variables considered in the study such as profit margin, asset utilization, net interest margin, overhead efficiency, and numbers of branches have a positive and statistically significant effect on the financial performance of commercial banks. Contrarily, the equity multiplier ratio has a negative and significant effect on the financial performance of commercial banks

Factors Influencing the Performance of Commercial Banks: A Dynamic Panel Study on India

2021 ◽  
pp. 231971452110215
Author(s):  
Sreemanta Sarkar ◽  
Debdas Rakshit
Keyword(s):  
Commercial Banks ◽  
Panel Study ◽  
Generalized Method Of Moments ◽  
Control Variables ◽  
Public And Private ◽  
Macroeconomic Factors ◽  
Explanatory Variables ◽  
Net Interest Margin ◽  
Public And Private Sector ◽  
The Impact

The article investigates the determinants of commercial banks’ performance in India over the period from 2000 to 2017 with special reference to the macroeconomic factors. Considering return on assets (ROA), return on equity (ROE) and net interest margin (NIM) as the measure of performance, we have chosen a panel of public and private sector commercial banks of our country. Taking some macro variables such as GDP, inflation and lending interest rate as the prime explanatory variables along with some bank-specific and macroeconomic control variables, first difference generalized method of moments (GMM) method has been applied to observe the impact of these macroeconomic factors on the performance of commercial banks. Results indicate that external variables significantly affect commercial banks’ performance and these findings remain unaltered with the sequential inclusion of all control variables. This work has immense importance to the bankers, planners and policymakers in shaping appropriate policy decisions for the commercial banks.

PENGARUH CAPITAL ADEQUACY RATIO DAN NET INTEREST MARGIN TERHADAP NILAI PROFITABILITAS BANK UMUM NON DEVISA DI INDONESIA

2018 ◽  
Vol 9 (1) ◽  
pp. 31-39
Author(s):  
Agus Saputra ◽  
Wirdah Irawati ◽  
Talbani Farlian
Keyword(s):  
Commercial Bank ◽  
Foreign Exchange ◽  
Financial Services ◽  
Banking Sector ◽  
External Factors ◽  
Capital Adequacy ◽  
Financial Report ◽  
Net Interest Margin ◽  
Capital Adequacy Ratio ◽  
Interest Margin

Penelitian ini bertujuan untuk menguji pengaruh antara variabel CapitalAdequacyRatio (CAR) dan Net Interest Margin, terhadap nilai Profitabilitas pada Bank Umum Non Devisa di Indonesia. Penelitian ini menggunakan data empiris dari direktori Kantor Otorita Jasa Keuangan melalui teknik purposive sampling. Ada 17 Bank yang diamati selama 3 tahun secara kuartal mulai tahun 2014 sampai tahun 2016. Peralatan analisis yang digunakan adalah Analisis Regresi Linear Berganda. Hasil penelitian menunjukkan bahwa Capital Adequacy Ratio (CAR) tidak berpengaruh terhadap nilai profitabilitas Bank Umum Non Devisa. Variable Net Interest Margin (NIM) memiliki pengaruh positif dan signifikan terhadap nilai profitabilitas Bank Umum Non Devisa. Penelitian ini memiliki implikasi pada dunia perbankan yaitu sebaiknya pihak perusahaan perbankan juga memperhatikan faktor eksternal dalam peningkatan nilai profitabilitas, juga seharusnya perusahaan perbankan selalu menyediakan laporan keuangan kepada para stakeholder yang akan berinvestasi kedalam perbankan. Keterbatasan penelitian adalah bahwa data yang diteliti hanya terdiri dari satu jenis bank umum yaitu bank non devisa di Indonesia, tidak semua bank memenuhi kriteria seperti yang diharapkan oleh peneliti.AbstractThis study examines the influence Capital Adequacy Ratio (CAR), Net Interest Margin (NIM), toward Profitability for Non-Foreign Exchange Commercial Bank in Indonesia. This study uses empirical data on the directory of Financial Services Authority (Otorita Jasa Keuangan) through non probability sampling that met criteria of the research. There are 17 Banks observed for 3 years quarterly starting from 2014 until 2016. The analytical method using Multiple Linear Regression. The results show that Capital Adequacy Ratio (CAR) has unsignificant effect on profitability. Variable Net Interest Margin (NIM) has a positive and significant influence toward profitability. This study has implication for the banking sector, although banks applied financial ratios to measure bank health, but banks should also pay attention for external factors to measure bank health, the Non-Foreign Exchange Commercial must prepare financial report to stakeholders who want to investment in the banking company. The limitation of this research is that the data only consist of one type of commercial bank that is non-foreign exchange bank in Indonesia, not all banks met the criteria as expected by the researcher.Keywords: Capital Adequacy Ratio (CAR), Net Interest Margin (NIM), Profitabi

scholarly journals Non-Performing Loan Determinants during COVID-19 Pandemic (Case Study at Bank XYZ)

2021 ◽  
Vol 8 (12) ◽  
pp. 301-310
Author(s):  
Didi Suradi ◽  
Hermanto Siregar ◽  
Bagus Sartono
Keyword(s):  
Exchange Rate ◽  
Linear Regression ◽  
Multiple Linear Regression ◽  
Small And Medium Enterprises ◽  
External Factors ◽  
Business Sector ◽  
Net Interest Margin ◽  
Medium Enterprise ◽  
Medium Enterprises ◽  
Interest Margin

Non-Performing Loans (NPL) is a financial ratio that shows the credit risk faced as a result of granting credit and investment funds on different portfolios. This study aimed to analyze the determinants of Non-Performing Loans (NPL) before and during the Covid 19 pandemic at Bank XYZ. NPL can be caused by internal or external factors from Bank XYZ. The analytical method used is the Mixed method which combines quantitative and qualitative analysis. Data analysis used multiple linear regression method using time series data for the 1st quarter of 2013- 4th quarter of 2020. The analysis method used multiple linear regression to see the influence of internal factors are total credit, Return on Equity, Loan to Deposit Ratio, Net Interest Margin, total assets, BOPO, condition dummy before after transformation and external factors are Benchmark Interest Rate, exchange rate (exchange rate), Inflation, Industry Production Index, dummy conditions before and during the Covid 19 pandemic on Bank XYZ's NPL. The estimated regressions are the overall NPL, the Small Medium Enterprise (SME) Business Segment NPL, the Small Medium Enterprise (SME) Business Segment for the wholesales business sector, and the Small Medium Enterprise (SME) Business Segment NPL for the Retailer business sector. Data processing using E-views software version 9.0. The result of this research are factors that affect the overall NPL: Dummy Transformation, Net Interest Margin, and total assets, for the NPL for the Small and Medium Enterprises (SME) segment: total assets, dummy transformation and Net Interest Margin (NIM), NPL for the Small and Medium Enterprises (SME) business sector Wholesales: BOPO NIM, Lending growth, total assets, ROE and Dummy Transformation, for the NPL segment of Small and Medium Enterprises (SMEs) Retailer business sector: Net Interest Margin (NIM) and total assets. The impact of the COVID-19 pandemic on NPLs was most felt by the NPL all, SME business segment credit and the wholesales business sector. Keywords: covid-19 pandemic, NPL, NPL SME, retailer, wholesales.

scholarly journals Credit Constraints for Microfinance Sector in Pakistan, an Analysis of Internal and External Factors

2015 ◽  
Vol 47 ◽  
pp. 164-173
Author(s):  
Muhammad Mohsin Khan
Keyword(s):  
Financial Services ◽  
Credit Constraints ◽  
External Factors ◽  
Poor People ◽  
Language Awareness ◽  
Internal Factors ◽  
Independent Variables ◽  
Employment Generation ◽  
Internal And External Factors ◽  
The Impact

Microfinance is considered to be an effective tool for poverty alleviation, employment generation, income generation and income equality. It is a financial service provided to poor people who do not have any other source of funds or have access to financial services. The purpose of this research paper is to determine the credit constraints that are facing by microfinance sector in Pakistan. The data is collected through structured questionnaires from 250 respondents who are employees of MFBs/ MFIs keeping in view three broad categories of theoretical framework including internal factors having sub variables like operational cost, HR capacity, innovation and external factors having sub variables like competition, language, awareness as independent variables and a dependent variable having sub variable that is credit constraints for microfinance sector. Regression analysis has been used to determine the impact of independent variables i.e. internal and external factors on dependent variable that is credit constraints. The study found that there is a significant impact of internal and external factors on the credit constraints facing the microfinance sector. Based on the results it is recommended that concerned authorities should give due importance to all sub variables of internal and external factors in order to minimize the issue of credit constraints facing the microfinance sector.

scholarly journals PENGARUH CAPITAL ADEQUACY RATIO, NET INTEREST MARGIN, LOAN TO DEPOSIT RATIO DAN NON PERFORMING LOAN TERHADAP PROFITABILITAS BANK UMUM NON DEVISA DI INDONESIA PERIODE 2014-2016

2019 ◽  
Vol 4 (2) ◽  
pp. 199-212
Author(s):  
Agus Saputra ◽  
Muhammad Arfan ◽  
Mulia Saputra
Keyword(s):  
Linear Regression ◽  
Commercial Bank ◽  
Foreign Exchange ◽  
Financial Services ◽  
Banking Sector ◽  
External Factors ◽  
Capital Adequacy ◽  
Net Interest Margin ◽  
Capital Adequacy Ratio ◽  
Interest Margin

This study examines the influence Capital Adequacy Ratio (CAR), Net Interest Margin (NIM), Loan to Deposit Ratio (LDR) and Non Performing Loan (NPL) toward Profitability for Non-Foreign Exchange Commercial Bank in Indonesia. This study uses empirical data on the directory of Financial Services Authority (Otorita Jasa Keuangan) through non probability sampling that met criteria of the research. There are 17 Banks observed for 3 years quarterly starting from 2014 until 2016. The analytical method using Multiple Linear Regression. The results show that Capital Adequacy Ratio (CAR) has unsignificant effect on profitability. Variable Net Interest Margin (NIM) has a positive and significant influence toward profitability. Variable Loan to Deposit Ratio (LDR) has unsignificant effect toward profitability, Non Performing Loan (NPL) has unsignificant effect toward profitability. This study has implication for the banking sector, although banks applied financial ratios to measure bank health, but banks should also pay attention for external factors to measure bank health. The limitation of this research is that the data only consist of one type of commercial bank that is non-foreign exchange bank in Indonesia, not all banks met the criteria as expected by the researcher. Keywords: Capital Adequacy Ratio (CAR), Net Interest Margin (NIM), Loan to Deposit Ratio (LDR), Non Performing Loan (NPL), Profitability.Abstrak Penelitian ini bertujuan untuk menguji pengaruh antara variabel Capital Adequacy Ratio (CAR), Net Interest Margin, Loan to Deposit Ratio dan Non Performing Loan terhadap Profitabilitas pada Bank Umum Non Devisa di Indonesia. Penelitian ini menggunakan data empiris dari direktori Kantor Otorita Jasa Keuangan melalui teknik purposive sampling. Ada 17 Bank yang diamati selama 3 tahun secara kuartal mulai tahun 2014 sampai tahun 2016. Peralatan analisis yang digunakan adalah Analisis Regresi Linear Berganda. Hasil penelitian menunjukkan bahwa Capital Adequacy Ratio (CAR) tidak berpengaruh signifikan terhadap profitabilitas Bank Umum Non Devisa. Variable Net Interest Margin (NIM) memiliki pengaruh positif dan signifikan terhadap profitabilitas Bank Umum Non Devisa. Variable Loan to Deposit Ratio (LDR) tidak memiliki pengaruh signifikan terhadap profitabilitas Bank Umum Non Devisa. Variabel NonPerforming Loan (NPL) tidak memiliki pengaruh signifikan terhadap profitabilitas Bank Umum Non Devisa. Penelitian ini memiliki implikasi pada dunia perbankan yaitu meskipun perbankan menerapkan rasio keuangan untuk mengukur kesehatan bank melalui profitabilitas, akan tetapi perbankan juga seharusnya memperhatikan faktor eksternal dalam mengukur kesehatan bank. Keterbatasan penelitian adalah bahwa data yang diteliti hanya terdiri dari satu jenis bank umum yaitu bank non devisa di Indonesia, tidak semua bank memenuhi criteria seperti yang diharapkan oleh peneliti.

scholarly journals The Impact of Variable Interactions on Lebanese Banks Fragility

2016 ◽  
Vol 8 (8) ◽  
pp. 111
Author(s):  
Ali Awdeh
Keyword(s):  
External Factors ◽  
Z Score ◽  
Bank Stability ◽  
Insolvency Risk ◽  
Net Interest Margin ◽  
The Common ◽  
Internal And External Factors ◽  
The Impact ◽  
Variable Interactions ◽  
Margin Deposit

<p>This paper aimed at studying the development of bank fragility in Lebanon over the period 1990-2013. Using the Z-score measure, we find significant improvement of bank stability over the studied period. We also detect the impact of several internal and external factors on Z-score and find that bank size, liquidity, and market concentration boost bank stability. Conversely, higher net interest margin, deposit growth, and inefficiency increase insolvency risk. We extend our analysis and test the impact of variable interactions on Z-score and show that the common impact of many variables totally differs from the impact of those variables separately. This finding stresses the importance of looking beyond the influence of each factor individually and considering the impact of interaction among variables on bank fragility.</p>

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