Measuring and Evaluating State-Owned Banking Industry in Indonesia using Risk Based Bank Rating (RBBR)

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Daryanto, Wiwiek Mardawiyah and Arrifa'i, Miftahul Ahyar (2019) Measuring and Evaluating State-Owned Banking Industry in Indonesia using Risk Based Bank Rating (RBBR). International Journal of Business, Economics and Law, 18 (1). pp. 1-13. ISSN 2289-1552

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Abstract

The measurement and evaluating of financial performances are becoming important due to the economic crisis of 1997/1998 which hit Asia and slower economic growth in Indonesia. The regulation of Otorisasi Jasa Keuangan (OJK), or Financial Service Authority provides a mandatory of Measuring Health Level Assessment System of Banking Industries in Indonesia by Circular Letter, SE No.14/SEOJK.03/2017. This study aims to measure and evaluate financial performances of four state-owned banks and one private bank in Indonesia for the period of 2012– 2016, by using the Risk Based Bank Rating (RBBR), which is a method framework of Risk Profile Factor, Good Corporate Governance, Earning and Capital. The finding shows that over the last five years, the financial performances achieved by the five banks seem increasing of non-performing loan and gave impact on declining of Return on Assets (ROA) performances, even though the measurement was validated as healthy predicate status respectively based on OJK standard rating. The finding was also proven by using multivariate regression, which shows that there was a significant indication that Non-Performing Loan (NPL) affected their ROA performances. The research suggests that all the tasks required by a credit analyst must be handed to professional employees, according to Five C’s of credit concept to improve the effectiveness in approving a credit loan. DuPont analysis is also suggested to be conducted to show how is the effectiveness towards the ROA Performance. Keywords: Financial performance, Risk Based Bank Rating, Risk Profile Factor, Earning, Good Corporate Governance, Capital State-Owned-Company banks.

Item Type:	Article
Subjects:	H Social Sciences > H Social Sciences (General) H Social Sciences > HF Commerce > HF5601 Accounting H Social Sciences > HG Finance
Divisions:	Research And Community Empowerment > Journals
Depositing User:	Rizky Amalia
Date Deposited:	24 Jan 2020 03:15
Last Modified:	19 Feb 2021 07:33
URI:	http://repository.ipmi.ac.id/id/eprint/596

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