Analysis of Factor Affecting Profitability of State Owned Banks in Indonesia and Notable Bank in Singapore as Basis for Bank Management Decision Making to Its Stakeholder

Eddy Winarso, Francis M. Hutabarat

2019

Abstract

Every firm has tendency only to seek profit whereas, the objective of a firm is not only to maximize profit and maximize their shareholder or owner but also seek to maximize the wealth of their stakeholder. This mean that a firm needs to benefit their stakeholder and one of the stakeholders of a firm is the community around the company. The purpose of the study is to analyze the factor affecting return on asset of state owned banks in Indonesia and notable bank in Singapore combined. The study is descriptive using CAR, NPL and LDR as their independent variable and ROA and ROE as their dependent variable. The financial used in the study is for financial data use in the study from annual report and financial statement from year 2013 – 2017. Data analysis using statistic analysis such as descriptive statistic F test, t test and regression analysis. The result shows that all state owned banks in Indonesia and notable bank in Singapore are healthy in terms of their minimum capital, non performing loan and their function well in LDR ratio and in their return on assetin this study also several ratios have been used and the results are very good, including CAR, NPL, LDR and ROA. The mean results for CAR are 18.5% for Indonesia and 16% for Singapore banks which is above 8% standard for minimum capital for a bank. NPL mean result is 2.5% for Indonesia and < 1% for Singapore which is below the minimum standard of 5% which shows that BUMN bank can manage their non-performing loans. On the other hand, BUMN bank also shows that they perform their function well in giving loans and receiving deposits from their customer as shows in LDR ratio of 91.124% for Indonesia and 85% for Singapore which is between 78-100% standard of Bank Indonesia. The descriptive statistic data also show that ROA has mean of 2.972% for Indonesia and 1.02% for Singapore that is above 1.5% standard of Bank Indonesia. The result shows that there is a significant relationship between CAR, NPL, LDR and ROA of state owned banks in Indonesia and notable bank Singapore combined from year 2013-2017. The results however are not significant for Return on Equity.

Paper Citation

in Harvard Style

Winarso E. and Hutabarat F. (2019). Analysis of Factor Affecting Profitability of State Owned Banks in Indonesia and Notable Bank in Singapore as Basis for Bank Management Decision Making to Its Stakeholder. In Proceedings of the 2nd Economics and Business International Conference - Volume 1: EBIC, ISBN 978-989-758-498-5, pages 473-479. DOI: 10.5220/0009258904730479

in Bibtex Style

@conference{ebic19,
author={Eddy Winarso and Francis M. Hutabarat},
title={Analysis of Factor Affecting Profitability of State Owned Banks in Indonesia and Notable Bank in Singapore as Basis for Bank Management Decision Making to Its Stakeholder},
booktitle={Proceedings of the 2nd Economics and Business International Conference - Volume 1: EBIC,},
year={2019},
pages={473-479},
publisher={SciTePress},
organization={INSTICC},
doi={10.5220/0009258904730479},
isbn={978-989-758-498-5},
}

in EndNote Style

TY - CONF

JO - Proceedings of the 2nd Economics and Business International Conference - Volume 1: EBIC,
TI - Analysis of Factor Affecting Profitability of State Owned Banks in Indonesia and Notable Bank in Singapore as Basis for Bank Management Decision Making to Its Stakeholder
SN - 978-989-758-498-5
AU - Winarso E.
AU - Hutabarat F.
PY - 2019
SP - 473
EP - 479
DO - 10.5220/0009258904730479