Study Findings from Diponegoro University Advance Knowledge in COVID-19 (Determinants of Indonesian banking profitability: Before and during the COVID-19 pandemic analysis): Coronavirus – COVID-19

2022 MAY 18 (NewsRx) — By a News Reporter-Staff News Editor at TB & Outbreaks Daily News — Fresh data on COVID-19 are presented in a new report. According to news reporting from Diponegoro University by NewsRx journalists, research stated, “The purpose of this paper is to substantiate the determinants of Indonesian banking profitability before and during the COVID-19 pandemic. Return on assets (ROA), return on equity (ROE), and net interest margin (NIM) were used to measure banking profitability.”

Our news reporters obtained a quote from the research from Diponegoro University: “The research population is 43 banks listed on the Indonesia Stock Exchange in 2020. Purposive sampling has been used to determine the research sample. The criteria are banks issued annual reports during the observation period (2019-2020). The data collection method used is documentation. Data analysis techniques used are descriptive analysis methods and multiple regression analysis. The results of the study indicate that banks experienced a decrease in profitability during the pandemic compared to before the pandemic. ROA before the pandemic was 0.82 and dropped to 0.62 during the pandemic; ROE from 1.76 to 1.32; and NIM became 4.79 from 4.91. Other results show that only Capital Adequacy Ratio CAR and Non-performing Loans (NPL) can determine bank profitability (ROA and ROE) significantly, both before and during the pandemic (the coefficient is -0.112 and -4.856 for CAR; -0.977 and -0.913 for NPL). CAR and NPL influence profitability negatively. Meanwhile, size and liquidity are not able to significantly influence profitability of Indonesian banking (ROA, ROE, and NIM).”

According to the news editors, the research concluded: “Bank management that can control NPL well will have a significant impact on profitability. Acknowledgment We thank to Faculty of Economics and Business Universitas Diponegoro for the funding of research and publication.”

For more information on this research see: Determinants of Indonesian banking profitability: Before and during the COVID-19 pandemic analysis. Banks and Bank Systems, 2022,17(2):37-46. (Banks and Bank Systems – https://businessperspectives.org/journals/banks-and-bank-systems?category_id=3). The publisher for Banks and Bank Systems is LLC “CPC “Business Perspectives”.

A free version of this journal article is available at https://doi.org/10.21511/bbs.17(2).2022.04.

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Our news journalists report that more information may be obtained by contacting Abdul Rohman, Ph.D., Professor, Faculty of Economics and Business, Diponegoro University. Additional authors for this research include Ahmad Nurkhin, Hasan Mukhibad, Kusumantoro, Christian Wiradendi Wolor.

(Our reports deliver fact-based news of research and discoveries from around the world.)