Analyzing The Effect Of Bank Characteristic On Profitability In Banking Companies Listed In Indonesia Stock Exchange


  • Serly Serly Universitas Internasional Batam



Return on asset, return on equity, net interest margin


This research is conducted to analyze the effect of bank characteristics on go public banks’ profitability in Indonesia. Return on asset, return on equity, and net interest margin are dependent variables in this research and involves five types of banking risks (credit, liquidity, security, capital, and insolvency), bank size and diversification, and cost efficiency. Research objects of this research are banking companies listed on Indonesian Stock Exchange (IDX). The research data is financial data issued by IDX from 2014 to 2018. Observation data collected in this research is processed using the regression panel method. The result from this research is that credit risk and insolvency risk has effect on return on asset and return on equity significantly. Liquidity risk, capital risk and bank size don’t have significant effect. Security risk and bank diversification effecting net interst margin significantly. Cost efficiency has effect on profitability significantly.


Download data is not yet available.


AL-Omar, H., & AL-Mutairi, A. (2008). Bank Specific Determinants of Profitability: The case of Kuwait. Journal of Economic and Administrative Sciences.

Alarussi, A. S., & Alhaderi, S. M. (2018). Factors affecting profitability in Malaysia. Journal of Economic Studies.

Alharbi, A. T. (2017). Determinants of Islamic banks’ profitability: international evidence. International Journal of Islamic and Middle Eastern Finance and Management.

Ariefianto, D. (2012). Ekonometrika, Esensi dan aplikasi dengan menggunakan Eviews. Jakarta: Erlangga.

Arif, A., & Anees, A. N. (2012). Liquidity risk and performance of banking system. Journal of Financial Regulation and Compliance.

Ashraf, R., Associate, R., Abbas, A., Anees, S., Zaidi, H., & Ahmad, W. (2014). Credit Risk Exposure and Performance of Banking Sector of Pakistan. J. Basic. Appl. Sci. Res, 4(3), 240–245. Retrieved from

Athanasoglou, P., Brissimis, S., & Delis, M. (2005). M P RA Bank-specific, industry-specific and macroeconomic determinants of bank profitability.

Badawi, A. (2017). Effect of Credit Risk, Liquidity Risk, and Market Risk Banking to Profitability Bank (Study on Devised Banks in Indonesia Stock Exchange). In European Journal of Business and Management ISSN (Vol. 9). Retrieved from Online website:

Claessens, S., Coleman, N., & Donnelly, M. (2017). “Low-For-Long†interest rates and banks’ interest margins and profitability: Cross-country evidence. Journal of Financial Intermediation, 0, 1–16.

Fidanoski, F., Choudhry, M., Davidović, M., & Sergi, B. S. (2018). What does affect profitability of banks in Croatia? Competitiveness Review.

Fu, X. (Maggie), Lin, Y. (Rebecca), & Molyneux, P. (2014). Bank competition and financial stability in Asia Pacific. Journal of Banking and Finance, 38(1), 64–77.

Ghozali, I. (2013). Aplikasi Analisis Multivariate dengan Program IBM SPSS 21 (7th ed.; P. P. Harto, ed.). Semarang: Badan Penerbit Universitas Diponegoro.

Grassa, R. (2016). Ownership structure, deposits structure, income structure and insolvency risk in GCC Islamic banks. Journal of Islamic Accounting and Business Research, 7(2), 93–111.

Hakimi, A., & Zaghdoudi, K. (2017). Liquidity Risk and Bank Performance: An Empirical Test for Tunisian Banks. Business and Economic Research.

Isanzu, J. S. (2017). The Impact of Credit Risk on the Financial Performance of Chinese Banks. JOURNAL OF INTERNATIONAL BUSINESS RESEARCH AND MARKETING.

Kani, S. (2017). Credit Risk and Banks Performance: Evidence from WAEMU Countries. IOSR Journal of Economics and Finance, 08(01), 05–11.

Kapaya, S. M., & Raphael, G. (2016). Bank-specific, Industry-specific and Macroeconomic Determinants of Banks Profitability: Empirical Evidence from Tanzania. International Finance and Banking, 3(2), 100.

Kristianti, R. A., & Yovin. (2016). Factors Affecting Bank Performance; Cases of Top 10 Biggest Government and Private Banks in Indonesia in 2004 - 2013. Review of Integrative Business and Economics Research, 5(4), 371–378.

Kuswanto, D. (2012). Statistika Untuk Pemula & Orang Awam (R. Maulana, ed.). Jakarta: Laskar Aksara.

Laeven, L., & Levine, R. (2009). Bank governance, regulation and risk taking. Journal of Financial Economics, 93(2), 259–275.

Lee, C. C., & Hsieh, M. F. (2013). The impact of bank capital on profitability and risk in Asian banking. Journal of International Money and Finance.

Leykun, F. (2016). Factors Affecting the Net Interest Margin of Commercial Bank of Ethiopia. International Journal of Scientific and Research Publications, 6(6). Retrieved from

Luqman, O. (2014). The Effect of Credit Risk on the Performance of Commercial Banks in Nigeria. In SSRN.

Maudos, J., & Solís, L. (2009). The determinants of net interest income in the Mexican banking system: An integrated model. Journal of Banking and Finance.

Menicucci, E., & Paolucci, G. (2016). The determinants of bank profitability: empirical evidence from European banking sector. In Journal of Financial Reporting and Accounting (Vol. 14).

Mokni, R. B. S., & Rachdi, H. (2014). Assessing the bank profitability in the MENA region A comparative analysis between conventional.

Munir, M. binti B., & Bustamam, U. S. A. (2017). Camel Ratio on Profitability Banking Performance (Malaysia Versus Indonesia). International Journal of Management, Innovation & Entrepreneurial Research, 3(1), 30–39.

Muriithi, J. G., Waweru, K. M., & Muturi, W. M. (2017). Liquidity Risk and Financial Performance of Commercial Banks in Kenya. International Journal of Economics and Finance.

Naceur, S. (2003). The Determinants of the Tunisian Banking Industry Profitability: Panel Evidence. Universite Libre de Tunis Working Papers, (November 2003), 1–17. Retrieved from

Naifar, N. (2010). The determinants of bank performance: an analysis of theory and practice in the case of an emerging market. International Journal of Business Environment.

Nguyen, J. (2012). The relationship between net interest margin and noninterest income using a system estimation approach. Journal of Banking and Finance.

Nouaili, M., Abaoub, E., & Ochi, A. (2015). International Journal of Economics and Financial Issues The Determinants of Banking Performance in Front of Financial Changes: Case of Trade Banks in Tunisia. International Journal of Economics and Financial Issues, 5(2), 410–417. Retrieved from

Nwude, E. C., & Okeke, C. (2018). International Journal of Economics and Financial Issues Impact of Credit Risk Management on the Performance of Selected Nigerian Banks. International Journal of Economics and Financial Issues, 8(2), 287–297. Retrieved from

Olamide, O., Uwalomwa, U., & Ranti, U. O. (2015). The Effect of Risk Management on Bank’s Financial Performance in Nigeria. Journal of Accounting and Auditing: Research & Practice, 2015.

Pasiouras, F., & Kosmidou, K. (2007). Factors influencing the profitability of domestic and foreign commercial banks in the European Union. Research in International Business and Finance.

Pervan, M., Pelivan, I., & Arnerić, J. (2015). Profit persistence and determinants of bank profitability in croatia. Economic Research-Ekonomska Istrazivanja.

Raharjo, P. G., Hakim, D. B., Manurung, A. H., & Maulana, T. N. (2014). The Determinant of Commercial Banks’ Interest Margin in Indonesia: An Analysis of Fixed Effect Panel Regression 1. International Journal of Economics and Financial Issues, 4(2), 295–308. Retrieved from

Rekik, M., & Kalai, M. (2018). Determinants of banks’ profitability and efficiency: Empirical evidence from a sample of Banking Systems. Journal of Banking and Financial Economics.

Saeed, M., & Zahid, N. (2016). The Impact of Credit Risk on Profitability of the Commercial Banks. Journal of Business & Financial Affairs.

Samad, A. (2015). Determinants Bank Profitability: Empirical Evidence from Bangladesh Commercial Banks. International Journal of Financial Research, 6(3).

Staikouras, C., Mamatzakis, E., & Koutsomanoli-Filippaki, A. (2008). Cost efficiency of the banking industry in the South Eastern European region. Journal of International Financial Markets, Institutions and Money, 18(5), 483–497.

Sufian, F., & Habibullah, M. S. (2009). Bank specific and macroeconomic determinants of bank profitability: Empirical evidence from the China banking sector. Frontiers of Economics in China.

Sun, P. H., Mohamad, S., & Ariff, M. (2017). Determinants driving bank performance: A comparison of two types of banks in the OIC. Pacific Basin Finance Journal.

Tan, Y. (2016). The impacts of risk and competition on bank profitability in China. Journal of International Financial Markets, Institutions and Money.

Tan, Y., Floros, C., & Anchor, J. (2017). The proftability of Chinese banks: Impacts of risk, competition and efficiency. Review of Accounting and Finance.

Terraza, V. (2015). The Effect of Bank Size on Risk Ratios: Implications of Banks’ Performance. Procedia Economics and Finance.

Tran, V. T., Lin, C. T., & Nguyen, H. (2016). Liquidity creation, regulatory capital, and bank profitability. International Review of Financial Analysis.

Wibowo, A. E. (2012). Aplikasi Praktis SPSS dalam Penelitian (A. Djojo, ed.). Yogyakarta: Gava Media.

World Bank. (2018). Towards inclusive growth. Indonesia Economic Quarterly, (March). Retrieved from


PlumX Metrics



How to Cite

Serly, S. (2021). Analyzing The Effect Of Bank Characteristic On Profitability In Banking Companies Listed In Indonesia Stock Exchange. Ekonika : Jurnal Ekonomi Universitas Kadiri, 6(1), 100–120.