Analysis of the Effect of Capital, Net Interest Margin, Credit Risk and Profitability in the Implementation of Banking Intermediation

Herry Achmad Buchory


The aim of this study was to analyze the factors that affect the implementation of banking intermediation include Capital, Net Interest Margin, Credit Risk and Profitability. The methods used are descriptive and verificative, with secondary data from financial statements all over 26 Indonesian Regional Development Banks as a research object’s units. Data analysis technique is the multiple linear regression, hypothesis testing while using t - test to examine the effect of partial variables and test - F to examine the effect of variables simultaneously with a significance level of 5 %. Based on the results it is concluded that partial NIM and ROA have positive and significant effects on LDR. NPL has positive effect but no significant effect to LDR. While the CAR has negative effect but no significant effect to LDR. Simultaneously CAR, NIM, NPL and ROA significantly influence the level of influence of LDR with 40.5 % while the remaining 59.5% thought to be influenced by other variables not examined in this study.

Keywords: Capital Adequacy Ratio; CAR; Loan to Deposit Ratio; LDR; Net Interest Margin;NIM; Non-Performing Loans;  NPLs; Return on Assets; ROA .

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ISSN (Paper)2222-1905 ISSN (Online)2222-2839

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