EFFECTS OF BANK SPECIFIC VARIABLES ON THE PERFORMANCE OF INDONESIAN BANKING INDUSTRIES by Nur Fatwa, Buyung Sarita, Zainuddin Saenong, Muh.Yani Balaka, Scientific Research Journal (Scirj), Volume V, Issue X, October 2017 Edition

Scirj Volume V, Issue X, October 2017 Edition
ISSN: 2201-2796

EFFECTS OF BANK SPECIFIC VARIABLES ON THE PERFORMANCE OF INDONESIAN BANKING INDUSTRIES

Nur Fatwa, Buyung Sarita, Zainuddin Saenong, Muh.Yani Balaka

Abstract: This study aims at examining the effects of specific variables of banks on the performance of the Indonesian banking industry. The data is based on sample of 106 conventional banks that are still active in conducting banking business activities in Indonesia. The type of data collected was a panel data consisting of time series and cross sectional data published by the Monetary and the Financial Services Authorities in Indonesia. The method used in this study is a quantitative statistical approach. To examine the competitiveness of the Indonesian banking industry, this study applied the theory of structure, conduct, performance with the addition of public policy and relative efficiency. The study found that market concentration, loan to group business, and market share of loan have a positive effects on the performance of the banking industry in Indonesia. Also, it was found the value of market share of deposit, loan loss provision, salaries and wage expenses to total assets, and non- performing loan have negative effects on the performance of the banking industry in Indonesia. However, loan to deposit ratio, loan to total assets, total liability to total assets, capital adequacy ratio, and total assets do not have any effects on the performance of Indonesian banking industry. This study suggests that due to the present high level of banking competition, the government should be give attention particularly toward the development of the small-scale banks that are unable to compete with large scale banks. Public policy toward further better performance of banking industries In Indonesia is must. In other words, the issuance of public policy by the government should give a positive impact on the performance of the Indonesian banking industry.

Reference this Paper: EFFECTS OF BANK SPECIFIC VARIABLES ON THE PERFORMANCE OF INDONESIAN BANKING INDUSTRIES by Nur Fatwa, Buyung Sarita, Zainuddin Saenong, Muh.Yani Balaka published at: "Scientific Research Journal (Scirj), Volume V, Issue X, October 2017 Edition, Page 72-82 ".

Search Terms: Bank specific variables, market structure, conduct, performance, public policy, relative efficiency, Banking Industry

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