STUDY RATIO FINANCIAL OF BANK PERFORMANCE: EVIDENCE FROM INDONESIA

Abstract

Purpose: This research will examine the effects of CAR, NPF, FDR, BOPO, and NIM on the performance of Bank Muamalat Indonesia using ROA.

Research Methodology: The quantitative method and multiple linear regression analyzes are used in this research, with an analytical technique for the least square equation (OLS). This study used purposeful sampling technique that the use of data from the population represents the entire population, the secondary data was also used in this research, the data used is the financial ratio from The Bank Muamalat Indonesia trimester financial statements from 2009 to 2018.

Findings: The research shows that the multiple regressions model shows a 0.731 R square; this means that 5 independent CAR, NPF, FDR, BOPO, and NIM variables are affected by a 73.1 percent ROA. However, another factor of 26.9 percent was influenced factor outside the model.

Implications. The result of this study is the recommendation for Muamalat Bank to improve their performance effectiveness and efficiency, and also for available research to contribute for the banking literature.

Originality: The bank performance in the assessment study as an explanatory variable can lead to a better understanding of third-party funds management and an important decision-making process for Muamalat Bank management.