Factors Affecting Banking Profitability in Indonesia

International Journal of Economics, Business and Accounting Research (IJEBAR)
Peer Reviewed – International Journal

Vol-1, Issue-1, 2017 (IJEBAR)
ISSN: 2454-1362, http://www.jurnal.stie-aas/ijebar
Factors Affecting Banking Profitability in Indonesia

(Studies at Bank BRI, Bank BNI, and BankBTN)
Budiyono
STIE AAS Surakarta
Email : budiyono_bk@yahoo.com
Abstract: The aim of this research is to know the (Booklet Banking Indonesia 2009). Banks in
influence of inflation, BI Rate and Non-Performing running their business raise funds from the
Loan (NPL) toward the profitability of BUMN bank community and redistribute them in various
studies in Bank Rakyat Indonesia, Bank Negara investment alternatives. In connection with this
Indonesia, and Bank Tabungan Negara. Profitability fund raising function, banks are often also called
is the company's ability to make a profit. The trust agencies.
purpose of a company's profitability analysis is to According to Adyani (2011), bank's financial
measure the level of business efficiency achieved by performance is a description of the bank's financial
the company concerned. The population in this condition for a certain period, covering both fund
research is all quarterly financial report of raising and distribution aspects. Trust and loyalty
Commercial Banks. While the sample used is the the owner of the funds to the bank is a very helpful
financial statements of the first quarter of 2013 until factor and simplify the bank management to
the fourth quarter of 2016 in Bank Rakyat, Bank develop a good business strategy. The analysis of
Negara Indonesia, and Bank Tabungan Negara. This the financial statements of a company is basically
research used multiple linear regression analysis. because it wants to know the level of profitability
The result of this research using F test shows that (profit) and level of risk or level of company
simultaneously the independent variable of inflation, health. The analysis of financial statements
BI Rate, and NPL have significant effect on requires an analyst to do some things including (1)
profitability. Partially the result using t test obtained to clearly define the purpose of the analysis, (2) to
that BI Rate and Non Performing Loan (NPL) have understand the concepts and principles underlying
significant effect on profitability while inflation has the report and the financial ratios derived from the
no effect on profitability. financialstatements, and (3) to understand the
economic and other business conditions generally
Key words: inflation, BI Rate, NPL, and associated with the company and affect the
Profitability. company's business (Mamduh, 2016: 5).
One of the indicators to see the prospects of a
A. Introduction company in the future is to see the growth of
profitability. The higher the profitability of a
Bank is a business entity that collects funds company the more likely the company will grow in
from the public in the form of savings and the future considering the profits earned can be
distributes it to the community in the form of credit reinvested for the company's operations.
and or other forms in order to improve the living Conversely, if the profitability of the company is
standard of many people (Laws of the Republic low then the opportunity to grow is smaller
Indonesia Number 10 Year 1998). From time to (Tandelilin, 2010: 372).
time the growth of banking in Indonesia is Profitability is the company's ability to
increasing rapidly, it is proved by the increasing generate profits at certain levels of sales, assets and
number of banks in Indonesia both national and capital stock (Mamduh, 2004: 42). Profitability can
foreign banks. be defined as the ability of companies to generate
Bank is an institution that acts as a financial profits from a number of policies and decisions
intermediary between parties who have the funds which are made and become one of the indicators
(surplus units) with the parties that require funds to see the prospects of a company in the future
(unit deficit) and as an institution that facilitate the (Hasan & Rusdayanti, 2014: 14).
flow of payment traffic. Bank also has the role of This research uses ROA (return on asset) as a
implementing monetary policy and achieving measure of profitability. ROA analysis measures
stability of financial system, so it needs a sound the ability of company to generate profits by using
banking, transparent, and accountable banking the total assets (wealth) owned by the company
after adjusted for the costs to fund the asset. The
International Journal of Economics, Business and Accounting Research (IJEBAR) Page 1

variation in ROA calculation is by including the in Indonesia" explains that simultaneously inflation,
cost of funding. ROA can be interpreted as a result BI rate, and GDP have a significant positive effect
of a set of company policies (strategies) and the on Islamic bank ROA in Indonesia, partial inflation
influence of environmental factors. The analysis and GDP (Gross Domestic Product) have a
focuses on the profitability of the asset, thus not significant positive effect but the BI rate has a
taking into account the ways to fund the asset significant negative effect on the ROA of Islamic
(Mamduh, 2016: 157). banks in Indonesia. Further the research from Dwi
In a Febrina study entitled "Febrina, Inflation Jayanthy (2009) entitled "An Analysis of Inflation
Analysis, BI Rate, and Currency Exchange Rate on Influence , BI Rate, and Currency Exchange Rate
Bank Profitability Period 2003-2007" explains that toward Bank Profitability Period 2003-2007"
inflation is a condition in which continuous explains that there is a negative relationship between
increases in prices (absolute) over a long period of inflation, exchange rate, and profitability, BI rate has
time and followed by the decline of real value no significant effect on profitability.
(intrinsic) value of a country's currency (Khalwaty, MillatinaArimi Research (2012) entitled "An
2000). The high rate of inflation can affect the Analysis of Factors Affecting Banking Profitability
banking sector; therefore Bank Indonesia needs to (Study On Commercial Bank Listed In Indonesia
set the appropriate interest rate (BI Rate) as the Stock Exchange Year 2007-2010)" explains that
basis or benchmark of commercial and private Non Performing Loan (NPL) has no significant
banks to determine the interest rate to be liquid and negative effect on Return On Asset (ROA). Further
profitable. One of the causes of the crisis research Satriyo and Muhammad (2013) entitled
experienced by Indonesia is the prolonged "Influence Analysis of Interest Rates, Inflation,
inflation. Revell (1979) stated there is a CAR, BOPO, NPF Against Islamic Bank
relationship between bank profitability and Profitability" explains that BI rate, inflation, CAR,
inflation. In addition, most researches of (Bourke and NPF have no effect on profitability.
1989, Molyneux& Thornton 1992) saw a positive From the results of above researches, there are
relationship between inflation or long-term interest differences in the results of research on inflation
rates with profitability and a negative relationship variables, BI rate and NPL on bank profitability.
between inflation and bank profitability as From those researches the researcher deepens her
suggested by Uche (1996) and Ogowewo&Uche research related profitability. This study is interesting
(2006). because bank profitability becomes a benchmark
The amount of interest rate (BI Rate) to be when people want to invest their wealth in the
one factor for banks to determine the interest rate financial institution. In addition, this research is also
offered to the public. Interest rates affect the desire useful for internal banking as a consideration in
and interest in the community to invest their funds managing how to obtain profitability and what
in the bank through the products offered. The factors influence it. For stakeholders this is important
impact of the bank itself, with the increasing because it can increase trust in investing funds in
amount of funds invested by the community, will banking.
increase the ability of banks to distribute funds in
the form of credit from which the credit channeled B. Underlying Theory
banks will gain profit, thus impacting the amount
of income obtained by banks (Almilia and Utomo, Inflation against Banking Profitability
2006).
Non-Performing Loan (NPL) reflects credit Profitability is the ability of a company
risk, the smaller NPL the less credit risk borne by to make a profit (Sartono, 2000: 122).
the bank. NPL reflects the financing risk, the Profitability as one of the benchmarks in
higher this ratio indicates the quality of bank measuring the amount of profit becomes so
financing is getting worse. Financing management important to know whether the company has
is needed by banks considering the financing run its business efficiently. The efficiency of
function is as the largest contributor of income for a new company can be known after
banks. The financing level of NPL financing comparing the profits earned with the assets
contributes to the achievement of bank profit or capital that generate the profit.
(Suhada, 2009). The Increasing of NPL will result Increased inflation will cause the real
in a loss opportunity to earn income from financing value of savings decline because the public
provided that affects earnings and adversely affects will use its wealth to meet the cost of
ROA. expenses due to rising prices of goods, which
AyuYanita's research (2013) entitled "An Analysis will affect the profitability of the bank
of Inflation Influence, BI Rate, and Gross Domestic (Sukirno, 2003 in Sahara, 2013). Fajaret. al.
Product toward the Return on Asset of Islamic Bank

(2013) states that inflation has a significant required data, the writer does research by using
effect on bank profitability. documentation method, namely the publication
of financial statements owned by the companies
BI Rate on Banking Profitability that are considered capable of providing data
BI rate also affect the profitability of with the significance of issues to be
banks. When the BI interest rate rises, it will investigated.
be followed by a rise in deposit interest rate
which directly affects the decline in third Data Analysis Technique
party funding sources. This decline in Data analysis technique used is multiple
deposits is as a result of the transfer of public linear regressions. Multiple linear regressions
funds to conventional banks to obtain higher are a model of relationship between two or
interest rates. If the third party funding falls, more variables that is between dependent
then the profitability of sharia banks will also variable with independent variable. The models
decrease (Karim, 2006). The result of the in this research are:
research of Juniarti (2013) stated that BI rate Y = a + b1X1 + b2X2 + b3X3 + e, whereas:
has a significant negative effect to banking a = constant of regression equation
profitability. Y = profitability
X1 = inflation-free variable
X2 = BI Rate -free variable
Non-Performing Loan (NPL) to Banking
X3 = NPL-free variable
Profitability
b1, b2, b3, b4 = multiple linear regression
Non-Performing Loan (NPL) is one of coefficient
the financial ratios that reflect credit risk. e = error coefficient
NPL is defined as a loan that has difficulty This study explains the relationship between
repayment or often called bad credit in the one dependent variable that is profitability
bank (Riyadi, 2006: 161). The result of the (ROA) with some independent variables that
research by Millatina Arimi (2012) stated that are inflation, BI Rate, and NPL.
Non Performing Loan (NPL) has no Before doing regression analysis, the
significant negative effect to the Return On classical assumption test is done first. The test
Asset (ROA). Furthermore Setiawan's is done on research model in order to be
research results (2010) explain the declared free from deviation of classical
relationship NPL with profitability that assumption that is normalitas, multicolinieritas,
variable NPF significant negative effect on autokorelasi, and heteroskedastisitas. Based on
ROA. the classical assumption it can be said that the
data of this research meet with the classical
C. Research Method assumption.
Population and Sample Classic Assumptions

According to Soeratno and Arsyad (2008:
101), population is the total of the object under Normality Test
study. The population in this research is all Normality test aims to test whether in
quarterly financial report of bank BRI, bank
the regression model, dependent variable and
BTN and bank BNI year 2013-2016. According
to Soeratno and Arsyad (2008: 101), the sample independent variable have normal distribution
is the part that becomes the real object of the or not. A good regression model has a normal
research. Meanwhile, according to Sugiyono or near-normal distribution of data (Ghozali,
(2010: 129), the sample size is feasible in the 2001: 83).
study is between 30 to 500. The samples in this When viewed from the graph the data
study are quarterly financial reports during the histogram is said to be normal if the shape of
first quarter of 2013 to third quarter of 2016
the curve has a tilt that tends to balance, on
that is as many as 36 samples.
the left or right side, and the curve resembles
Research Data a nearly perfect bell. When viewed with
The type of the data used in this study is normal probability plots data is said to be
secondary data, where the researcher looks for normally distributed or close to normal if the
data published by bank BRI, bank BTN and image is distributed with dots of data
bank BNI in the form of financial statements as spreading around the diagonal line and
a source of data. In order to obtain some

spreading data points in the direction of to each other. A good regression model
following the diagonal line. is a regression independent of
The residual normality test in this study autocorrelation (Ghozali, 2011: 110).
is using Kolmogorov-Smirnov (K-S) non- Decision-making whether or not
parametric statistical test, by making there is autocorrelation using Durbin-
hypothesis as follows: Waston statistics table with the
1. If the probability is greater than 0.05 (> 0.05) following categories (Santoso, 2001:
H0 is accepted, the residual variable is 219)
normally distributed. 1. The D-W number below -2 means
2. If the probability is less than 0.05 (<0.05) H 0 there is a positive autocorrelation.
is rejected, the residual variable is not 2. The D-W number is between -2 to +2,
normally distributed. meaning there is no autocorrelation.
3. The D-W number above +2 means
Multicollinierity Test there is a negative autocorrelation
Multicollinearity is a situation
where there is correlation of Heteroscedasticity Test
independent variables between one The heteroscedasticity test aims to
another. The linear relationship between test whether in the regression model
independent variables can occur in the there is a variance inequality of the
form of perfect and imperfect linear residual one observation to another
relationships. observation. If the variance of one
The way to detect the presence of residual observation to another
multicollinearity is to regress the observation remains, then it is called
analysis model and doing test the Homocedasticity and if it is different it
correlation between independent called Heteroscedasticity. A good
variables using tolerance values and regression model is homocedasticity or
Variance Inflation Factor (VIF). does not occurheteroscedasticity
Tolerance measures the variability of (Ghozali, 2001: 77).
other independent variables. Thus, a low Heteroskedasticity test can be seen
tolerance value is equal to a high VIF with Scatterplot image analysis which
value (because VIF = 1 / tolerance) and states multiple linear regression models
indicates a high degree of collinierity. there is no heteroscedasticity if:
If the tolerance value is greater 1. The data points spread above and
than 0.1 and the VIF value is less than below or around the number 0.
10 then there is no multicollinearity in 2. Data points do not collect just above or
the study. Conversely, if the tolerance below only.
value is less than 0.1 and the VIF value 3. The spread of data points should not
is greater than 10 then there is form wavy patterns then narrow and
multicollinearity (Ghozali, 2001: 63). widen again.
4. The spread of data points should not be
Autocorrelation Test patterned.
The autocorrelation test aims to
test whether the linear regression model Goodness Model Test
has a correlation between the
confounding errors in period t with the F Test
previous confounding error t-1. If there This test is conducted to see the
is a correlation, then there is an effect of independent variables to the
autocorrelation problem. dependent variable simultaneously. This
Autocorrelation arises because of test is performed to compare at the level
sequential observations over time related of significance value (α = 5%) at the
degree level of 5%. The taking of the

conclusion is to see the value of sig α conclusion is to look at the sig. value
(5%), the provisions as follows: compared to α (5%) with the following
1) If the sig value < α or Fcount > Ftable conditions:
then H0 is rejected 1. If sig value is <α or tcount>ttable then
2) If the value of sig > α or Fcount<Ftable H0 is rejected
then H0 is accepted 2. If sig value is > α or tcount<ttable then
The calculation of F test in this H0 is accepted
D. Finding And Discussion
research is used to test the significance
relation of inflation, BI rate, and NPL Descriptive Statistics
relationship to bank profitability
together. Table 1.Deskriptive Statistics
Mean Std. Deviation N
Coefficient of Determination (R2)
The coefficient of determination ROA 2.8450 1.23468 36
INLASI 5.4442 1.77945 36
(R2) is used to determine the extent to
which the accuracy or suitability of the Bi RATE 7.0208 .92461 36
regression line formed in representing NPL 2.9319 1.00336 36
the observed data group. The coefficient
of determination describes part of the Table 1 shows the average ROA of
total variation that can be explained by 2.85%, Inflation of 5.44%, then the average
the model. The greater the value of R2 value of BI rate of 7.02%. While the average
(close to 1), the accuracy is said to be value of NPL 2.93% of the criteria is
better. The properties possessed by sufficient standard of sound value of Bank
coefficient of determination are as Indonesia.
follow:
Testing and Results Classical Assumptions
1) The value of R2 is always positive
because it is the ratio of the sum of The classic assumption test at this stage
squares. is done to determine the validity of the data
2) R2 = 0, means there is no which will be included in a regression model,
relationship between X and Y, or if the resulting data qualifies in this test then
an incorrectly formed regression the data is feasible for testing the regression
model to predict Y. stage. The results of the testing classical
3) R2 = 1, the regression line formed assumptions in this study are as follows:
can predict Y perfectly (Setiawan,
2010: 64-65). 1. Normality Test
The coefficient of determination Normality test is used to test whether
test used to know the influence variable the model specifications used are correct
of inflation, BI rate and NPL to or not. The data is normally distributed
profitability. when the spreading points are in the
vicinity of a straight line. The results of
Influence Validity Test or t Test this study can be seen in Figure 1.
This significance test is performed
by using statistical test t. This test is
done to see the influence of independent
variables to dependent variable partially Figure 4.1 P.Plot
with degree of validity 5%. The

3. Autocorrelation Test
The autocorrelation test is used to
test whether in the linear regression
model there is a correlation between the
intruder errors in the period with the
disturbance error in period t- 1
(previous). Furthermore, to see whether
or not there is an autocorrelation in a
model can be known from the value of
Durbin Watson, while the results of this
Figure 1 shows a linear relationship
study can be seen in the table below:
between Inflation, Bi rate and NPL
variables. It can be known because the
distribution of data follows a straight Table 3: Summary of autocorrelation test
results
line from the lower left to the upper
right, so it can be concluded from the
test criteria, the data is said to be normal
distribution.
2. Multicollinearity Test
Multicollinearity test is needed to
Table 3 shows that the value
test whether the regression model found
generated by Durbin Watson is 1,294.
any correlation between independent
The value indicates that it is still
variables. A good regression model
between -2 to +2, which means there is
should not occur correlation between
no autocorrelation. So it can be
independent variables with the test
concluded that there is no
criteria of VIF (variance inflation factor)
autocorrelation of the variable inflation,
coefficient not more than 10 and
BI rate and NPL.
Tolerance value not less than 0.1, to see
4. Heteroscedasticity Test
the presence or absence of The heteroscedasticity test was used
multicollinearity can be known based on to test whether in the regression model
the tolerant and VIF values contained in there was a variance inequality in
table 2. residual one observation to another
observation. If the variance residual of
Table 2
one observation to another observation
Summary of multicollinearity test results
are remains, then it is
calledhomocedasticity and if different is
called heteroscedasticity, a good
regression model is homocesdasticity.
The results of this study can be seen in
figure 2:
Table 2 shows that the result of VIF

value is less than 10 and the Tolerance
value is not less than 0.1 so it can be
said to be free of multicollinearity. So it
can be concluded that there is no
multicollinearity between the inflation
variable, Bi rate, and NPL in the
regression model.

Figure 2. Result of heteroscedasticity test of state State-Owned Enterprises

(BUMN) banks that can be written as
follows:
Y = α + β1X1 + β2X2 + β3X3
Y = 3.237 - 0.037X1 + 0.380X2 - 0.977X3
The multiple regression
coefficients of the equation are X1 =
0.037, X2 = 0.380, X3
= 0.977. It means that if each independent
variable increases one-unit, then the
Inflation variable (X1) influence on the
inflation variable will decrease by 0.037,
Bi rate (X2) influence on ROA variable
will increase by 0.380, and NPL (X3)
influence on ROA variable will decrease
Figure 2 shows the homocedastity
by 0.977.
model because the variance of one
observed residual to other observation Model goodness test
remains, between the inflation variable, 1. Test F
Bi rate, and NPL since the data Test F is a test to determine whether
distribution does not form wavy patterns or not there is influence overall
then narrows. So it can be concluded independent variables to the dependent
that the multiple linear regression model variable, while the results of this study
does not contain heteroscedasticity and can be seen from table 5.
is suitable to be used in the model. Table 5. Summary of simultaneous test
results (F test) of state-owned enterprises
Multiple Regression Analysis banks
The regression model is used to know
the regression equation on Inflation, Bi
Rate, NPL to ROA and indirectly to
predict how the condition (up and down)
individually every independent variable
influence the change to ROA variable.
Regression model generated in this study Source: data processed 2017
are as follow:
Table 4. The summary of Summary of Based on table 5 above in the F test
regression model calculation results can be known from the results obtained in
column F and also from the result of the
sig. column. To know simultaneously the
result of influence from every
independent variable that is inflation
variable, Bi rate, and NPL to dependent
variable that is ROA of state bank (BRI,
BNI and BTN) obtained the value of Fcount
equal to 55.435, with df1: 3-1 = 2 and
Based on table 4 can be known the df2: 36-3 = 33, it can be known Ftable of
function of multiple linear regression 3.28. So from the calculation criteria that
models Fcount> Ftable is 55.435> 3.28 means H0
rejected and accept Ha. Furthermore,
based on testing of the probability value
or sig. value of the resulting value is

0.000, where the value is less than the Table 7. Summary of partial test results (t
value of α is 5%, then it can be said H0 test) of state own enterprise (BUMN)
rejected and received Ha. So from the banks
criteria, the hypothesis that there is a
significant influence between inflation, Bi
rate and NPL to ROA can be said to be
accepted which means the inflation
variable, Bi rate, Non-Performing Loan
(NPL) has a significant influence on
Return of Assets (ROA).
2. Determination Test of R2 Based on table 6 in t test can be seen the
This test is conducted to find out results obtained from the column t and also
how far the independent variable explain from the result sig. column. To know the
its influence to dependent variable which result of influence from every independent
means how big of influence of inflation variable partially that is inflation variable, Bi
variable, Bi rate, and NPL to ROA rate and NPL to dependent variable that are
variable of state own enterprise bank BRI bank's BRI, BNI and BTN are as follow:
(BRI, BNI and BTN). The results of this 1. Result of Inflation Calculation on ROA
test can be seen from the results of table
The result of the inflation calculation
6.
variable (X1) the value generated equal to
Table 6. Summary of Coeficient Results .174. So the result of the calculation, tcount
Determination R2 <ttable that is -0.452 <2.03693, it means H0
accepted. So the hypothesis that there is a
significant influence between inflation on
ROA can be said rejected. Based on the
test of the probability value that can be
known from the result of the sig. value of
.655, where the value is greater than the
value of α, that is 5%, then the conclusion
Table 6. shows the result of R2
H0 accepted. It means that the inflation
which can be seen in column R equal to
variable does not affect the ROA in state
0.916 or can be said as 91.6%. It means
own enterprise banks (BRI, BNI and
that the independent variable, the inflation
BTN).
variable, the Bi rate and the NPL has a
contribution of 91.6% to the ROA of the 2. Result of Bi rate calculation to ROA
state-owned enterprise banks (BRI, BNI The calculation result of variable Bi
and BTN), while the rest of 8.4% is Rate (X2) the value is 2,479. So the result
explained by other variables outside the of the calculation was tcount> ttable that is
variables used. 2.909> 2.03693, it means H0 rejected.
Hence the hypothesis that there is a
significant influence between Bi rates on
Validity Influence Test
ROA can be said accepted. Based on the
T test is a test to determine whether or not
test of the probability value or sig. value
the influence of each independent variable
can be known from the result sig value.
partially or individually to the independent
.007, where the value is less than the value
variable. On the other hand it also to know
of α, that is 5%, then the conclusion H0
which variable is the most dominant in
rejected. It means that the variable Bi rate
influencing independent variables. The results
has significant effect on ROA in state-own
of this study can be seen from the results of
enterprise banks (BUMN) (BRI, BNI and
table 7.
BTN).

3. NPL Calculation Result on ROA enterprise banks (BRI, BNI and BTN). The
The calculation result of NPL variable results of this study are reinforced by the
(X3) the value generated equal to 8,433. results of research Febrina (2009), Edhi and
So the result of the calculation was tcount> Muhammad (2013) and (Silvia, 2013) which
ttable that is 8.433> 2.04841 it means H0 concluded that inflation does not significantly
rejected. Then the hypothesis that there is affect the level of profitability.
a significant influence between NPL on The effect of BI rate on Return of Assets
ROA can be said accepted. Based on the (ROA) of state-own enterprise (BUMN)
test of the probability value or sig value Bank (BRI, BNI and BTN).
can be known from the result of the sig Based on the calculation of variable Bi
value, where the value is less than the rate (X2) the value generated is 2,479. So the
value of α, that is 5%, and then the result of the calculation is tcount> ttabel that is
conclusion is H0 rejected. It means that the 2.909> 2.03693, meaning H0 rejected. So the
NPL variable has a significant effect on hypothesis that there is a significant effect
the ROA in the state-own enterprise banks between Bi Rate on ROA can be said
(BUMN) bank. accepted. Based on the test of the probability
value or sig. value can be known from the
E. DISCUSSION OF RESEARCH RESULTS result of the value of sig .007, where the value
is less than the value of α, that is 5%, then the
The Influence of Inflation on Return of conclusion H0 rejected. It means that the BI
Assets (ROA) of state own enterprise BUMN Rate variables significantly affect the ROA in
bank (BRI, BNI and BTN). state-own enterprise banks BRI, BNI and
Based on the calculation of the inflation BTN).
variable (X1) the resulting value is 174. So the From the calculation of the researcher,
result of the calculation tcount <ttable is -0.452 the researcher concludes that the higher
<2.03693, meaning H0 accepted. So the interest rate of Bank Indonesia will have a
hypothesis that there is a significant influence good impact on the level of bank profitability.
between inflation on ROA can be said to be The higher the Bank Indonesia set BI rate it
rejected. Based on the test of the probability will help the banks in obtaining public funds.
value that can be known from the result of the This has an impact on the level of
sig. value is .655, where the value is greater profitability of banks derived from the
than the value of α, that is 5%, then the benefits of lending and other investment
conclusion H0 accepted. This means that the returns. This study supports Lisa's (2014)
Inflation variable does not affect the ROA in study results which conclude that interest rate
state own enterprise (BUMN) banks (BRI, risk significantly affects bank profitability.
BNI and BTN).
From the result, the researcher The Influence of Non-Performing Loan (NPL) to
concludes that inflation happened not directly Return of Assets (ROA) of BUMN Bank.
and significantly influence to profitability Based on the calculation of NPL (X3)
level of a bank, especially state owned variable, the resulting value is 8,433. So the
enterprise bank BRI, BNI and BTN). The result of the calculation tcount> ttable that is
researcher suspects there are other factors that 8.433> 2.03693 means H0 rejected. Then the
are more influential on the level of banking hypothesis that there is a significant influence
profitability. between NPL on ROA can be said accepted.
The impact of the inflation rate can be Based on the test of the probability value or
covered by other variables such as BI rate, sig. value can be known from the result of the
non- performing loans and the number of sig. value of .000, where the value is less than
funding and landing customers of a bank so the value of α, that is 5%, then the conclusion
inflation does not affect the profitability of H0 rejected. It means that the NPL variable
banks in Indonesia, especially state-owned

has a significant effect on the ROA in state- Bank SyariahPeriode 2005 – 2008, Tesis,
owned enterprise banks (BRI, BNI and BTN). FE, Undip Semarang.
NPL is a financing problem caused by Adi Stiawan, 2016, Analisis Laporan Keuangan,
depositors cannot pay bills or financing. So Yogyakarta: UPP STIM YKPN.
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Agus S, 2001, Manajemen Keuangan, Teori Dan
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Factors Affecting Banking Profitability in Indonesia

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International Journal of Economics, Business and Accounting Research (IJEBAR)

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Factors Affecting Banking Profitability in Indonesia

International Journal of Economics, Business and Accounting Research (IJEBAR) Page 1

International Journal of Economics, Business and Accounting Research (IJEBAR) Page 2

Population and Sample Classic Assumptions

International Journal of Economics, Business and Accounting Research (IJEBAR) Page 3

International Journal of Economics, Business and Accounting Research (IJEBAR) Page 4

International Journal of Economics, Business and Accounting Research (IJEBAR) Page 5

Table 2 shows that the result of VIF

International Journal of Economics, Business and Accounting Research (IJEBAR) Page 6

Figure 2. Result of heteroscedasticity test of state State-Owned Enterprises

International Journal of Economics, Business and Accounting Research (IJEBAR) Page 7

International Journal of Economics, Business and Accounting Research (IJEBAR) Page 8

International Journal of Economics, Business and Accounting Research (IJEBAR) Page 9

International Journal of Economics, Business and Accounting Research (IJEBAR) Page 10

Sofyan, 2007, Teori Akuntansi, Jakarta: Riyanto, Bambang. 2001. Dasar-Dasar

International Journal of Economics, Business and Accounting Research (IJEBAR) Page 11

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