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Research Article | Open Access
Volume 8 | Issue 3 | Year 2021 | Article Id. IJEMS-V8I3P103 | DOI : https://doi.org/10.14445/23939125/IJEMS-V8I3P103

Determinants of Indonesian Banking Profitability and The Influence On Capital Structure

Suryadi, Bambang Purwoko, Tri Widyastuti

Citation :

Suryadi, Bambang Purwoko, Tri Widyastuti, "Determinants of Indonesian Banking Profitability and The Influence On Capital Structure," International Journal of Economics and Management Studies, vol. 8, no. 3, pp. 19-24, 2021. Crossref, https://doi.org/10.14445/23939125/IJEMS-V8I3P103

Abstract

This study aims to analyze the determinants of banking profitability in Indonesia and their impact on the capital structure of banks. Monthly Data were obtained from The Financial Services Authority (OJK). Data Analysis use Structural Equation Modeling. The novelty of this research is to compare the research objectives at the time before and when the bank was regulated and supervised by OJK. The findings of this study:
1. There is no influence of the external factor with interest rate on the bank profitability before banks are regulated by OJK, and there is a negative influence of the external factor with inflation on the bank profitability when the banks are regulated by OJK.
2. There is a negative influence of the internal factor with NPL on the bank profitability variable before the banks are regulated by OJK, and There is a positive influence of the internal factor with Log Asset on the bank profitability variable when the banks are regulated by OJK.
3. There are no influence of external, internal and profitability factors on the bank capital structure, before and when the banks are regulated by OJK.

Keywords

Determinant, Profitability, Capital Structure, Variable, Internal Factor, External Factor

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