THE INFLUENCE OF BANKING HEALTH INDICATORS ON PROFITABILITY FOR THE 2017-2020 PERIOD IN INDONESIA
Keywords:
Capital adequacy ratio, Loan to deposit ratio, Non performing loan, Return on asset, banking sectorAbstract
The purpose of this study was to determine the effect of Capital Adequacy Ratio (CAR), Loan to Deposit Ratio (LDR), and Non-Performing Loan (NPL) on Return on Assets (ROA) in the banking sector with a sample of 35 banks. The research data is taken from the financial statements for the 2017-2020 period. This research uses multiple linear regression analysis methods with panel data. Empirical results show that the Capital Adequacy Ratio (CAR) has no effect on Return on Assets (ROA), Loan to Deposit Ratio (LDR) has a positive effect on Return on Assets (ROA), and Non Performing Loans (NPL) has a negative effect on Return on Assets ( ROA). The model is influenced 72.8% by the variables used in the study, while the rest are variables that are not studied.
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