Analysis of the Influence of Internal Factors, External Factors and Bank Risk Factors on Rural Banks Performance
DOI:
https://doi.org/10.59261/jbt.v4i2.155Keywords:
Bank Internal Factors, Bank External Factors, Risk Factors and Bank PerformanceAbstract
This study aims to prove the influence of bank internal factors, bank external factors and bank risk factors on the performance of Rural Banks (BPR). The research was conducted on BPRs that were categorized as BPRKU 3 with a core capital of at least IDR 50 billion at the end of 2021. The total sample of BPRKU 3 tested was 75 BPRs with a data period of 2016-2021. Data were analyzed using a quantitative approach using the SEM-PLS method through the SmartPLS 3 application. The results showed that internal factors had no effect on financial performance. While external factors have a positive and significant effect on financial performance while risk factors have a negative and significant effect on BPR financial performance.
References
Al Zaidanin, JS, & Al Zaidanin, OJ (2021). The Impact of Credit Risk Management on The Financial Performance of United Arab Emirates Commercial Banks. International Journal of Research in Business and Social Science (2147- 4478), 10(3), 303–319. https://doi.org/10.20525/ijrbs.v10i3.1102
Ali, K., Akhtar, MF, & Ahmed, HZ (2011). Bank-Specific and Macroeconomic Indicators of Profitability - Empirical Evidence from the Commercial Banks of Pakistan. 2(6), 235–242.
Alper, D., & Anbar, A. (2011). Bank Specific and Macroeconomic Determinants of Commercial Bank Profitability: Empirical Evidence from Turkey. Business and Economics Research Journal Uludag University, 2(2), 139–152.
Ariwidanta, KT (2016). The Effect of Credit Risk on Profitability with Capital Adequacy as a Mediating Variable. Unud Management E-Journal, Vol. 5, No. 4, 2016: 2311–2340, 5(4), 2311–2340.
Ariyibi, EM, Yunusa, LA, & Willams, TO (2020). Bank Specific Factors and Bank Performance : Evidence from Nigeria. 9(2), 167–176.
National Planning and Development Agency. (2013). 2013 Interregional Gap Analysis.
Basel Committee on Banking Supervision. (2000). Principles for the Management of Credit Risk.
Bessis, J. (2015). Risk Management in Banking (4th ed.). John Wiley & Sons, Ltd.
Bilal, M., Saeed, A., Gull, AA, & Akram, T. (2013). Influence of Bank Specific and Macroeconomic Factors on Profitability of Commercial Banks: A Case Study of Pakistan.
Dendawijaya, L. (2009). Management of Financial Institutions (2nd ed.). Indonesian Ghalia.
Ghozali, I., & Latan, H. (2015). Concepts, Techniques, Applications Using the Smart PLS 3.0 Program for Empirical Research. BP Undip.
Gul, S., Irshad, F., & Zaman, K. (2011). Factors Affecting Bank Profitability in Pakistan. The Romanian Economic Journal, 39, 61–87. http://www.rejournal.eu/sites/rejournal.versatech.ro/files/issues/2011-03-01/561/gul20et20al20-20je2039.pdf
Kesumayuda, IN, Utama, MS, & Purbadharmaja, I. (2016). Analysis of Internal and External Factors Influencing the Financial Performance of Regional Development Banks in Indonesia 2010-2013 Period. Bulletin of Economic Studies, 21(1), 26–37.
Khan, AS, & Khan, A. (2018). Internal Factors, External Factors and Bank's Profitability. December. https://doi.org/10.31529/sjms.2018.4.2.9
Kiganda, EO (2017). Effect of Macroeconomic Factors on Commercial Banks Profitability in Kenya : Case of Equity Bank Limited Effect of Macroeconomic Factors on Commercial Banks Profitability in Kenya : Case of Equity Bank Limited. may.
Naseem, I., & Shah, SQ (2012). The Profitability of Banking Sector in Pakistan : An Empirical Analysis from 2006-2010. II(February 2012).
Ngatno, D. (2015). Mediating and Moderating Variable Data Analysis in Business Research with the SPSS Program. CV Farisma Indonesia.
Octaviyanty, K. (2013). Analysis of Internal and External Factors Affecting the Performance of Commercial Banks in Indonesia in the 2008-2011 Period. 9(1).
OJK Regulation No.13/POJK.03/2015 concerning Application of Risk Management for Rural Banks, (2015).
Republic of Indonesia Financial Services Authority. (2016). Indonesian Banking Development Roadmap for the BPR and BPRS Industry 2021-2025. July, 1–23.
OJK Circular Letter No.28/SEOJK.03/2019 concerning the Rating System for Sharia Rural Banks, (2019).
OJK Circular Letter No.9/SEOJK.03/2020 concerning Transparency and Publication of Conventional Commercial Bank Reports, (2020).
Prasetiyo, E. (2019). Having a BPR Is Easy. Deepublish.
Law of the Republic of Indonesia Number 7 of 1992 concerning Banking as amended by Law Number 10 of 1998, Pub. L.No. State Gazette of the Republic of Indonesia of 1998 Number 182 (1998).
Riyadi, S. (2006). Banking Assets And Liability Management (4th Edition). Publishing Institute Faculty of Economics & Business, University of Indonesia.
Saksonova, S. (2014). The Role of Net Interest Margin in Improving Banks' Asset Structure and Assessing the Stability and Efficiency of their Operations. Procedia - Social and Behavioral Sciences, 150, 132–141. https://doi.org/10.1016/j.sbspro.2014.09.017
Sarwono, J. (2006). Quantitative & Qualitative Research Methods (1st ed.). Science House.
Siddique, A., Khan, MA, & Khan, Z. (2021). The Effect of Credit Risk Management and Bank-specific Factors on the Financial Performance of the South Asian Commercial Banks. Asian Journal of Accounting Research. https://doi.org/10.1108/AJAR-08-2020-0071
Sugiyono. (2013). Educational Research Methods (Quantitative, Qualitative and R&D Approaches). CV Alphabet.
Supriyono, RA, & Herdhayinta, H. (2019). Determinants of Bank Profitability: the Case of the Regional Development Bank (BPD Bank) in Indonesia. Journal of Indonesian Economy and Business, 34(1), 1. https://doi.org/10.22146/jieb.17331
Downloads
Published
Issue
Section
License
Copyright (c) 2023 Setia Ariyanto, P. Basuki Hadiprajitno
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
Authors who publish with this journal agree to the following terms:
- Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution-ShareAlike 4.0 International (CC-BY-SA). that allows others to share the work with an acknowledgement of the work's authorship and initial publication in this journal.
- Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgement of its initial publication in this journal.
- Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work.
