The Influence of CAR, NPL, and LDR on Profitability in Private Banks in Indonesia which are Classified as Commercial Banks Business Activities 3 in The Period 2014-2018

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Lisa Polimpung
Jie Lydia Irawan

Keywords

CAR, NPL, LDR, ROA

Abstract

Bank is a financial institution that has an important role in the economy. The bank's performance is important to know both by the bank itself and by investors where investors need to know the performance of a bank so that they can be sure of the security guarantees for the funds they invest in the bank. This study analyzes the effect of Capital Adequacy Ratio (CAR), Non Performing Loan (NPL), and Loan to Deposit Ratio (LDR) on Return On Assets (ROA). In this study using multiple linear regression using 10 banks which are included in Commercial Banks for Business Activities 3 and classified as private banks in the 2014-2018 period. The partial test results show that CAR and NPL have an effect on ROA, while LDR has no effect on ROA. Simultaneously, CAR, NPL, and LDR have an effect on ROA

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