Implication of Capital Liquidity to the Profitability of Commercial Banks in Indonesia

2019 Research Journal of Finance and Accounting  
This study aims to determine whether there are implications of liquidity core capital on the profitability of commercial banks book IV in 2012 -2016 in Indonesia, other things also to know the magnitude of the influence of capital adequacy and liquidity on bank profitability. The variables to measure bank profitability are Loan to Deposit Ratio (LDR), Capital Adequacy Ratio (CAR), and Return on Asset (ROA). The sample of this research is 5 banks in Indonesia from 2012 until 2016. This research
more » ... ethod use multiple linear regression. The research hypothesis was tested using F-test statistic and T-test statistic. The analysis shows that CAR is proportional to ROA, but LDR is inversely proportional to ROA. LDR has a significant negative effect (with p-value 0.026) on ROA. If the LDR value is too high, it means that the bank does not have sufficient liquidity to cover its obligations to customers is Third Party Fund (TPF).
doi:10.7176/rjfa/10-2-12 fatcat:3w2jvtukjjc6fgzyuclvfdinbu