Financial Performance Determinants in Indonesian Banking: The Role of Credit Risk and Bank-Specific Factors

Dim Zarita Suryanugraha; Galih Nugraha; Dodi Tirtana; Tine Badriatin; Ana Sakinatun Nisa

doi:10.14421/jai.2026.5.1.012-022

Authors

Dim Zarita Suryanugraha Siliwangi University
Galih Nugraha Siliwangi University
Dodi Tirtana Siliwangi University
Tine Badriatin Siliwangi University
Ana Sakinatun Nisa Siliwangi University

DOI:

https://doi.org/10.14421/jai.2026.5.1.012-022

Keywords:

Bank Specific Factor, Credit Risk, Financial Performance, KBMI, Non-Performing Loan

Abstract

Purpose: This study examines the effects of credit risk and bank-specific factors on the financial performance of Indonesian banks, particularly Bank Groups Based on Core Capital (Kelompok Bank Berdasarkan Modal Inti/KBMI) 3 and 4, and addresses inconsistent findings in previous studies on bank profitability.

Methodology: The study employs panel data from 13 commercial banks listed on the Indonesia Stock Exchange during 2015–2024, yielding 130 observations. Financial performance is measured by Return on Assets (ROA), while credit risk is proxied by Non-Performing Loans (NPL). Bank-specific factors include Loan-to-Deposit Ratio (LDR), Operating Expenses to Operating Income (BOPO), Net Interest Margin (NIM), and Current Account Saving Account (CASA). The Random Effects Model (REM) with White cross-section standard errors is used for estimation.

Findings: NPL and BOPO have significant negative effects on ROA, while LDR and NIM positively and significantly affect ROA. CASA has an insignificant effect on ROA.

Novelty: This study provides evidence from large Indonesian banks and shows that operational efficiency and interest margin management are more important drivers of profitability than low-cost funding accumulation, offering implications for bank management and policymakers.

References

Accornero, M., Cascarino, G., Felici, R., Parlapiano, F., & Sorrentino, A. M. (2018). Credit risk in banks’ exposures to non‐financial firms. European Financial Management, 24(5), 775–791. https://doi.org/10.1111/eufm.12138

Akbar, A. A., & Nurdiansyah, D. H. (2024). The Effect of NPL, BOPO, NIM on ROA of State-Owned Banks Listed on The Indonesia Stock Exchange. INVEST: Jurnal Inovasi Bisnis dan Akuntansi, 5. https://doi.org/10.55583/invest.v5i1.635

Al Zaidanin, J. S., & Al Zaidanin, O. J. (2021). The impact of credit risk management on the financial performance of United Arab Emirates commercial banks. International Journal of Research in Business and Social Science (2147- 4478), 10(3), 303–319. https://doi.org/10.20525/ijrbs.v10i3.1102

Anindiansyah, G., Sudiyatno, B., Puspitasari, E., & Susilawati, Y. (2020). Pengaruh CAR, NPL, BOPO dan LDR terhadap ROA dengan NIM sebagai variable intervening (Studi pada bank yang go publik di Bursa Efek Indonesia periode tahun 2015-2018)

Aspal, P. K., Dhawan, S., & Nazneen, A. (2019). Significance of Bank Specific and Macroeconomic Determinants on Performance of Indian Private Sector Banks. International Journal of Economics and Financial Issues, 9(2). https://doi.org/10.32479/ijefi.7727

Atichasari, A. S., Ratnasari, A., Kulsum, U., Kahpi, H. S., Wulandari, S. S., & Marfu, A. (2023). Examining non-performing loans on corporate financial sustainability: Evidence from Indonesia. Sustainable Futures, 6, 100137. https://doi.org/10.1016/j.sftr.2023.100137

Berger, A. N., & DeYoung, R. (1997). Problem loans and cost efficiency in commercial banks. Journal of Banking & Finance, 21(6), 849–870. https://doi.org/10.1016/S0378-4266(97)00003-4

Boachie, R., Aawaar, G., & Domeher, D. (2023). Relationship between financial inclusion, banking stability and economic growth: A dynamic panel approach. Journal of Economic and Administrative Sciences, 39(3), 655–670. https://doi.org/10.1108/JEAS-05-2021-0084

Ekinci, R., & Poyraz, G. (2019). The Effect of Credit Risk on Financial Performance of Deposit Banks In Turkey. Procedia Computer Science, 158, 979–987. https://doi.org/10.1016/j.procs.2019.09.139

Farrell, M. J. (1957). The Measurement of Productive Efficiency. Journal of the Royal Statistical Society. Series A (General), 120(3), 253. https://doi.org/10.2307/2343100

Fitri, R., & Nuraini, D. (2023). Effect of CASA, Fee-Based Income, and Intellectual Capital Towards Profitability of Islamic Banking in Indonesia. Muqtasid: Jurnal Ekonomi Dan Perbankan Syariah, 14(1), 35–50. https://doi.org/10.18326/muqtasid.v14i1.35-50

Hanafia, F., & Karim, A. (2020). Analisis CAR, BOPO, NPF, FDR, NOM, Dan DPK Terhadap Profitabilitas (ROA) Pada Bank Syari’ah Di Indonesia. Target : Jurnal Manajemen Bisnis, 2(1), 36–46. https://doi.org/10.30812/target.v2i1.697

Haryanto, S. (2016). Determinan Permodalan Bank Melalui Profitabilitas, Risiko, Ukuran Perusahaan, Efisiensi Dan Struktur Aktiva. Jurnal Ekonomi dan Bisnis, 18(1), 117. https://doi.org/10.24914/jeb.v19i1.483

Ho, T. S. Y., & Saunders, A. (1981). The Determinants of Bank Interest Margins: Theory and Empirical Evidence. The Journal of Financial and Quantitative Analysis, 16(4), 581. https://doi.org/10.2307/2330377

Indonesia, I. B. (2015). Manajemen Risiko 1. Gramedia Pustaka Utama.

Jennifer, Radianto, W. E. D., & Kohardinata, C. (2022). Determinant effect of CASA and NPM on market ratio of banks listed in IDX. Business and Finance Journal, 7(2), 217–237. https://doi.org/10.33086/bfj.v7i2.3490

Mahdatika, I. C., & Shofawati, A. (2022). Pengaruh Manajemen GAP, Modal, Likuiditas, Risiko Pembiayaan, Tingkat Efisiensi dan Ukuran Bank (Size) terhadap Net Interest Margin pada Bank Syariah Mandiri, Bank BRI Syariah dan Bank BNI Syariah Tahun 2015-2019. Islamic Banking : Jurnal Pemikiran dan Pengembangan Perbankan Syariah, 7(2), 315–332. https://doi.org/10.36908/isbank.v7i2.304

Markowitz, H. (1952). Portofolio Selection. The Journal of Finance, 7(1), 77–91. https://doi.org/10.1111/j.1540-6261.1952.tb01525.x

Minsky, H. P., Gurley, J. G., Shaw, E. S., & Enthoven, A. C. (1961). Money in a Theory of Finance. The Journal of Finance, 16(1), 138. https://doi.org/10.2307/2977668

Monika, A., Hakim, A. L., & Ahmad, A. N. (2022). Pengaruh Current Asset Saving Account (Casa) Dan Fee-Based Income (Fbi) Terhadap Return on Asset (Roa) Pada Bank Jabar-Banten Syariah (Bjbs) Periode 2016-2020. Jurnal Ekonomi Syariah Pelita Bangsa, 7(02), 138–147. https://doi.org/Doi.org/10.37366/jespb.v7i02.584

Nanda, A. S., Hasan, A. F., & Aristyanto, E. (2019). Pengaruh CAR dan BOPO Terhadap ROA pada Bank Syariah pada Tahun 2011-2018. Perisai : Islamic Banking and Finance Journal, 3(1), 19–32. https://doi.org/10.21070/perisai.v3i1.2160

Ofori-Abebrese, G., Pickson, R. B., & Opare, E. (2016). The Effect of Bank Specific Factors on Loan Performance of HFC Bank in Ghana. International Journal of Economics and Finance, 8(7), 185. https://doi.org/10.5539/ijef.v8n7p185

OJK. (2024). Indonesia Banking Booklet 2024 (11th ed.). Departement of Banking Licensing and Crisis Management Otoritas Jasa Keuangan.

Oluwafemi, A., Stephen. (2013). Risk Management and Financial Performance Of Banks In Nigeria. IOSR Journal of Business and Management, 14(6), 52–56. https://doi.org/10.9790/487X-1465256

Purnamawati, I. G. A. (2016). The effect of capital structure and profitability on stock price (Study of the manufacturing sector in Indonesia Stock Exchange). International Journal of Business, Economics and Law, 9(1), 10-16

Putera, A. V. A., & SS, V. D. (2025). The Influence of CASA, FBI, LDR and BOPO on Digital Banking Profitability in Indonesia. Contemporary Studies in Economic, Finance and Banking, 4(2).

Rahmatullah, D. (2025). The Role of Bank Profitability and Liquidity in Indonesia’s Economic Growth: An Empirical Study on ROA, LDR, and CAR. 16(02).

Ramadanti, F., & Setyowati, E. (2022). Pengaruh NPL, LDR, BOPO dan Nim Terhadap Roa Pada PT. Bank Mandiri (Persero) Tbk Tahun 2013-2021. Ekombis Review: Jurnal Ilmiah Ekonomi dan Bisnis, 10(2). https://doi.org/10.37676/ekombis.v10i2.2170

Setyarini, A. (2020). Analisis pengaruh CAR, NPL, NIM, BOPO, LDR terhadap ROA (Studi pada Bank Pembangunan Daerah di Indonesia periode 2015-2018). Research Fair Unisri, 4(1). https://doi.org/10.33061/rsfu.v4i1.3409

Siddique, A., Khan, M. A., & Khan, Z. (2022). The effect of credit risk management and bank-specific factors on the financial performance of the South Asian commercial banks. Asian Journal of Accounting Research, 7(2), 182–194. https://doi.org/10.1108/AJAR-08-2020-0071

Subairi, S., Anwar, K., Ramadhani, E. F., & Hamzah, Muh. (2022). Kontribusi Giro Dalam Penghimpunan Dana Current Account Saving Account (CASA) Pada PT Bank Sumut KCP Syariah SImpang Kayu Besar. Profit: Jurnal Kajian Ekonomi dan Perbankan Syariah, 6(1). https://doi.org/10.33650/profit.v6i1.3516

Sukma, A., Marlina, M., & Kusmana, A. (2021). Analisis Bank Specific Factor terhadap Penyaluran Kredit Perbankan Konvensional. Jurnal Akuntansi, Keuangan, dan Manajemen, 2(4), 293–307. https://doi.org/10.35912/jakman.v2i4.463

Sunaryo, D., Kurnia, D., Adiyanto, Y., & Quraysin, I. (2021). Pengaruh Risiko Kredit, Risiko Likuiditas dan Risiko Operasional Terhadap Profitabilitas Perbankan Pada Bank Umum di Asia Tenggara Periode 2012-2018. Jurnal Ilmu Keuangan dan Perbankan (JIKA), 11(1), 62–79. https://doi.org/10.34010/jika.v11i1.3731

Suryanugraha, D. Z., Masitoh, N., & Nisa, A. S. (2025). Analisa Prediksi Kebangkrutan Perusahaan (Financial Distress) Menggunakan Metode Altman Z-Score Pada BPR Dan BPRS Kota Dan Kabupaten Tasikmalaya Jawa Barat 2019 – 2023. Akuntansi 45, 6(1), 165–175. https://doi.org/10.30640/akuntansi45.v6i1.4225

Syafi’i, I., & Haryono, S. (2021). Pengaruh Leverage, Ukuran Perusahaan dan Inflasi terhadap Profitabilitas Pada Bank Umum Syariah di Indonesia. MALIA: Journal of Islamic Banking and Finance, 5(1), 17–26.https://doi.org/10.21043/malia.v5i1.10482

Wulandari, S. P., & Wahyudi, I. (2025). Pengaruh Current Account Saving Account (CASA) terhadap Return on Assets (ROA) pada Bank Konvensional di Indonesia: Peran Moderasi Capital Adequacy Ratio (CAR). Liabilities (Jurnal Pendidikan Akuntansi), 8(2), 62–73.

Yulyanti, S., Jamil, P. C., & Habillah, J. (2024). The Impact of Non-Performing Loans (NPL) and Loan-to-Deposit Ratio (LDR) on the Profitability of Conventional Commercial Banks Listed on the Indonesia Stock Exchange. INVEST: Journal of Business and Accounting Innovation, 4. https://doi.org/10.55583/invest.v4i1