The Factors that Affect the Profitability of Banks Listed on the Indonesia Stock Exchange
Keywords:
Banks, EPS, DER, PBV, ROEAbstract
This study aims to study the factors that affect the profitability of banking sector companies listed on the Indonesia Stock Exchange. The object of this research is banks listed on the Indonesia Stock Exchange in the 2015-2019 period. The factors used in this study are financial factors in the form of financial ratios reported by the company in its annual report. In this study, the dependent variables used are Earning Per Share (EPS), Debt to Equity Ratio (DER), and Price to Book Value (PBV). For the independent variable used is Return on Equity (ROE). This study uses multiple linear regression analysis with panel data analysis techniques. This study found that Earning Per Share (EPS), Debt to Equity Ratio (DER) and Price to Book Value (PBV) significantly influence Return on Equity.
Downloads
References
Al-Abedallat, A.Z., Factors affecting the profitability of banks: A field study of banks operating in Jordan. European Scientific Journal, 2017. 13(22): p. 141-162.DOI: https://doi.org/10.19044/esj.2017.v13n22p141.
Nouaili, M.A., E. Abaoub, and A. Ochi, The determinants of banking performance in front of financial changes: Case of trade banks in Tunisia. International Journal of Economics and Financial Issues, 2015. 5(2): p. 1-8.
Ben Naceur, S. and M. Goaied, The determinants of commercial bank interest margin and profitability: evidence from Tunisia. Frontiers in finance and economics, 2008. 5(1): p. 106-130.
Jočienė, A., Scandinavian bank subsidiaries in the Baltics: Have they all behaved in a similar way? Intelektinė ekonomika, 2015. 9(1): p. 43-54.DOI: https://doi.org/10.1016/j.intele.2015.09.002.
Taani, K., Capital structure effects on banking performance: A case study of Jordan. International Journal of Economics, Finance and Management Sciences, 2013. 1(5): p. 227-233.DOI: https://doi.org/10.11648/j.ijefm.20130105.13.
Neves, M.E., C. Proença, and A. Dias, Bank profitability and efficiency in Portugal and Spain: A non-linearity approach. Journal of Risk and Financial Management, 2020. 13(11): p. 284.DOI: https://doi.org/10.3390/jrfm13110284.
Khairani, I., The Effect of Earning Per Share (EPS) and Dividend Per Share on the Share Price of Mining Companies Listed on the Indonesia Stock Exchange (IDX) in 2011-2013. Jurnal Manajemen dan Keuangan, 2016. 5(2): p. 566-572.
Idawati, W. and A. Wahyudi, Effect of earning per shares (EPS) and return on assets (ROA) against share price on coal mining company listed in Indonesia stock exchange. Journal of Resources Development and Management, 2015. 7: p. 79-91.
Sumantri, M.B.A., The Factors that Affect the Profitability of Banks Listed on the Indonesia Stock Exchange. Turkish Journal of Computer and Mathematics Education (TURCOMAT), 2021. 12(8): p. 1456-1460.
Basu, S., Investment performance of common stocks in relation to their price‐earnings ratios: A test of the efficient market hypothesis. The journal of Finance, 1977. 32(3): p. 663-682.DOI: https://doi.org/10.1111/j.1540-6261.1977.tb01979.x.
Bojare, K. and I. Romanova, The factors affecting the profitability of banks: The case of Latvia, 5(4) , 78-95. 2017.DOI: https://doi.org/10.35808/ersj/753.
Panditharathna, K. and H. Kawshala, The Relationship between Corporate Governance and Firm Performance. Management and Administrative Sciences Review, 2017. 6(2): p. 73-84.
Downloads
Published
Issue
Section
License
Copyright (c) 2022 Author
This work is licensed under a Creative Commons Attribution 4.0 International License.
You are free to:
- Share — copy and redistribute the material in any medium or format for any purpose, even commercially.
- Adapt — remix, transform, and build upon the material for any purpose, even commercially.
- The licensor cannot revoke these freedoms as long as you follow the license terms.
Under the following terms:
- Attribution — You must give appropriate credit , provide a link to the license, and indicate if changes were made . You may do so in any reasonable manner, but not in any way that suggests the licensor endorses you or your use.
- No additional restrictions — You may not apply legal terms or technological measures that legally restrict others from doing anything the license permits.
Notices:
You do not have to comply with the license for elements of the material in the public domain or where your use is permitted by an applicable exception or limitation .
No warranties are given. The license may not give you all of the permissions necessary for your intended use. For example, other rights such as publicity, privacy, or moral rights may limit how you use the material.
