Capital adequacy of the banking industry in Indonesia
This study analyzes the relationship between credit risk and profitability on the capital adequacy ratio (CAR) of commercial banks in Indonesia. The empirical model result shows that credit risk and profitability performance altogether significantly influence the capital adequacy ratio (CAR). Parti...
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| Format: | Article |
| Language: | English |
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Universitas Islam Indonesia
2015-10-01
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| Series: | Economic Journal of Emerging Markets |
| Subjects: | |
| Online Access: | http://uiistage.openjournaltheme.com/3310/index.php/JEP/article/view/4258 |
| _version_ | 1818063739137556480 |
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| author | Sri Murtiyanti Noer Azam Achsani Dedi Budiman Hakim |
| author_facet | Sri Murtiyanti Noer Azam Achsani Dedi Budiman Hakim |
| author_sort | Sri Murtiyanti |
| collection | DOAJ |
| description |
This study analyzes the relationship between credit risk and profitability on the capital adequacy ratio (CAR) of commercial banks in Indonesia. The empirical model result shows that credit risk and profitability performance altogether significantly influence the capital adequacy ratio (CAR). Partially, the variables that significantly influence the CAR are the characteristics and complexity of the bank group. This study also suggests that the pace towards the long-term balance is, in general, less than one year. Capital ratio in the banking industry is 8%, indicating the bank has set aside to anticipate the impact of external factors as well as to comply with Bank Indonesia Regulation Number 15/12/PBI/2013.
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| first_indexed | 2024-12-10T14:24:53Z |
| format | Article |
| id | doaj.art-8602e510b972454787cadac7f7e8264f |
| institution | Directory Open Access Journal |
| issn | 2086-3128 2502-180X |
| language | English |
| last_indexed | 2024-12-10T14:24:53Z |
| publishDate | 2015-10-01 |
| publisher | Universitas Islam Indonesia |
| record_format | Article |
| series | Economic Journal of Emerging Markets |
| spelling | doaj.art-8602e510b972454787cadac7f7e8264f2022-12-22T01:45:07ZengUniversitas Islam IndonesiaEconomic Journal of Emerging Markets2086-31282502-180X2015-10-0172Capital adequacy of the banking industry in IndonesiaSri Murtiyanti0Noer Azam Achsani1Dedi Budiman Hakim2Postgraduate Program in Management and Business, Institut Pertanian Bogor, Indonesia.Postgraduate Program in Management and Business, Institut Pertanian Bogor, Indonesia.Postgraduate Program in Management and Business, Institut Pertanian Bogor, Indonesia. This study analyzes the relationship between credit risk and profitability on the capital adequacy ratio (CAR) of commercial banks in Indonesia. The empirical model result shows that credit risk and profitability performance altogether significantly influence the capital adequacy ratio (CAR). Partially, the variables that significantly influence the CAR are the characteristics and complexity of the bank group. This study also suggests that the pace towards the long-term balance is, in general, less than one year. Capital ratio in the banking industry is 8%, indicating the bank has set aside to anticipate the impact of external factors as well as to comply with Bank Indonesia Regulation Number 15/12/PBI/2013. http://uiistage.openjournaltheme.com/3310/index.php/JEP/article/view/4258credit riskprofitability and capital adequacy ratio |
| spellingShingle | Sri Murtiyanti Noer Azam Achsani Dedi Budiman Hakim Capital adequacy of the banking industry in Indonesia Economic Journal of Emerging Markets credit risk profitability and capital adequacy ratio |
| title | Capital adequacy of the banking industry in Indonesia |
| title_full | Capital adequacy of the banking industry in Indonesia |
| title_fullStr | Capital adequacy of the banking industry in Indonesia |
| title_full_unstemmed | Capital adequacy of the banking industry in Indonesia |
| title_short | Capital adequacy of the banking industry in Indonesia |
| title_sort | capital adequacy of the banking industry in indonesia |
| topic | credit risk profitability and capital adequacy ratio |
| url | http://uiistage.openjournaltheme.com/3310/index.php/JEP/article/view/4258 |
| work_keys_str_mv | AT srimurtiyanti capitaladequacyofthebankingindustryinindonesia AT noerazamachsani capitaladequacyofthebankingindustryinindonesia AT dedibudimanhakim capitaladequacyofthebankingindustryinindonesia |