The Effect of CAR, NPL, and LDR on ROA of SOE Banks in Indonesia (Case Study at a State-Owned Bank Listed on the IDX)

Bank health is an important thing in the banking world, because an unhealthy bank will be a threatmenr for the bank's internal element that affected the customers. This research is to find out and analyze the effect of CAR, NPL and LDR partially or simultaneously on the ROA of BUMN banks, for examples, Bank Mandiri, Bank Negara Indonesia (BNI 46), Bank Rakyat Indonesia (BRI) and Bank Tabungan Negara (BTN) since 2009-2017. Data collection techniques was by accessing www.idx.com. This type of research was quantitative research. The analytical tool used in this study was multiple linear regression analysis, using E-Views software. Chow Test and Hausman Test was used to choose the best multiple linear regression analysis between Common Effect, Fixed Effect, and Random Effect.The partial test results show that the NPL variable has a significant effect on ROA of state-owned banks in Indonesia. Simultaneous test results show that CAR, NPL and LDR significantly affected ROA Keywords: bank health, IDX DOI: 10.7176/RJFA/11-10-14 Publication date: May 31 st 2020


c. Earning
Earning is one of the bank's health assessments in terms of profitability. The characteristic of banks in terms of profitability is the bank's performance in generating profits, the stability of the components that support core eraning, and the ability of earnings to improve capital and future profit prospects.

d. Capital
Capital has indicators including bank capital adequacy ratios to anticipate potential losses according to risk profiles, which are accompanied by very strong capital management in accordance with the characteristics, scale of business, and complexity of the bank's business.

Financial Ratios
According to Van Horne, financial ratio is an index that connects two accounting numbers which are obtained by dividing one number by another. Financial ratio is used to evaluate the financial condition and performance of the company. From the results of this financial ratio, the health condition of the company concerned will be seen. Capital market According to Fahmi (2015: 48), the capital market is a place where various parties, especially companies sell shares (bonds) and bonds (Bond) that will later be used as additional funds or to strengthen the company's capital.

C. Research methods Types of research
This study used a quantitative approach. Quantitative approach is a type of research that produces findings that can be reached (obtained) using statistical procedures or other means of quantification (measurement). Based on the level of explanation of the position of the variable, this research was associative in nature, namely, this study seeks a causal relationship (impact) between the independent variable (X) and the dependent variable (Y).

Operasional Definition
1. CAR (X1) ratio that shows how many the total assets that contains risk by dividing bank capital by riskweighted assets. 2. NPL (X2) is the ratio of the ratio of total non-performing loans to loans provided by banks. 3. LDR (X3) is the ratio of loans given to funds received by banks (current accounts, savings, deposits). 4. ROA (Y) is a profitability ratio that is used to measure the effectiveness of a company in generating profits by utilizing the total assets it has.

Population, Samples, and Sampling
The population used in this study were banking companies listed on the Indonesia Stock Exchange within the study period (2014 to 2016). The sample in this study was a Bank listed on the Indonesia Stock Exchange with a period of 2014-2016 with the sampling technique used that was Purposive Sampling by determining the complete year data criteria.

Data collection technique
Data collection technique in this study used document analysis techniques. Document analysis technique was used to obtain data on bank financial ratio listed on the Indonesia Stock Exchange for the period 2009 -2017 and data sourced from bank publication reports.

Data analysis technique a. Classic assumption test
The classic assumption test is carried out to ensure that there are no multicollinearity, autocorrelation and heteroscedasticity in the study, and are normally distributed.

b. Regression Equations using Multiple Linear Regression
The analysis technique that used in this research was multiple linear analysis techniques to obtain a comprehensive picture of the relationship between one variable with another variable. The dependent variable used was Return On Assets (ROA) and the independent variables werr Capital Adequacy Ratio (CAR), Non Performing Loan (NPL), and Loan to Deposit Ratio (LDR). Y = a + β1X1 + β2X2 + β3X3 + e Notes : Y = Return On Asset a = A constant β1-β4 = Regression Coefficient X1 = Capital Adequacy Ratio X2 = Net Performing Loan X3 = Loan to Deposit Ratio E = Error c. Regression Coefficient (R) Effect of CAR, NPL and LDR on ROA This analysis was used to determine the relationship between two or more independent variables (X1, X2, .... Xn) to the dependent variable (Y) simultaneously.

d. Coefficient of Determination (R2)
The purpose of this analysis was to calculate the amount of influence of independent variables on the dependent variable.

e. Simultaneous Test (F Test)
The significance of the regression model was simultaneously tested by looking at the significance value (Sig) where if the sig value is below 0.05 then the independent variable influences the dependent variable. F-statistic test was used to prove that there was an influence between the independent variables on the dependent variable simultaneously.

f. Partial Test (t test)
The significance test of individual parameters (t) was used to show how far the influence of one independent variable individually in explaining the variation of the dependent variable.

g. Best Multiple Linear Correlation Test (Chow Test and Hausman)
In this study also calculated the effective contribution (SE) used to test which independent variables dominantly influence the dependent variable. The Chow test was to test which common effect with fixed effect was the best. The Hausman test was to test which fixed effect with Random Effcet was the best. LM test was to test between the common effect with which random effect was the best.

D. Analysis and Discussion Analysis of Research Results
Based on the table above we get the multiple linear regression equation as follows : 1. a) The constant value can be interpreted that if there is no Capital Adequacy Ratio, Non Performing Loans, Loan to Deposite Ratio then the Return On Asset is 5,436. b) b = 0.050 indicates that each reduction in Capital Adequacy Ratio by 1% will be followed by an additional Return on Assets of 0.050 with the assumption that other variables are fixed. c) c = 0.462 indicates that each Non-Performing Loan reduction of 1% will be followed by the addition of 0.462 Return On Assets with the assumption that other variables are fixed. d) d = -0.002 indicates that any reduction in Loan to Deposite Ratio of 1% will be followed by the addition of Return On Assets of -0.002 with the assumption that other variables are fixed. 9.
t Test Decision criteria of the following hypotheses: 1) If the significant level is greater than 5%, it can be concluded that H0 is accepted, and vice versa. 2) If the significant level is less than 5%, it can be concluded that H0 is rejected, otherwise Ha is accepted. a) There is no significant effect on the independent variable (CAR) toward the dependent variable (ROA). b) There is an effect on the independent variable (NPL) significantly toward the dependent variable (ROA). c) There is no significant effect on the independent variable (LDR) toward the dependent variable (ROA).

The Effect of CAR, NPL, And LDR on Roa of Soe Banks in Indonesia
From the results of testing the research variables simultaneously showed a significant relationship between the variables CAR, NPL and LDR on ROA. So that the fourth hypothesis can be stated which states that CAR, NPL and LDR simultaneously have a significant effect on ROA in state-owned banks in Indonesia, accepted.
Research Journal of Finance and Accounting www.iiste.org ISSN 2222-1697 (Paper) ISSN 2222-2847 (Online) Vol.11, No.10, 2020 It can be concluded, if the three variables are in a healthy level, it can be said that bank profits are proxied by ROA, so the child increases. Information regarding the health of the bank is expected to be used by the public or bank investors as an option in making decisions in investing funds or saving in banks.

Effect of CAR on ROA
From the results of testing the CAR variable produced that the CAR variable shows negative and insignificant results on ROA at state-owned banks in Indonesia. Thus the hypothesis which states that the CAR variable has a significant effect on ROA, is rejected.
From the test results, the regression coefficient which shows positive results means that the increased CAR value will tend to decrease ROA, and vice versa, if there is a decrease in CAR, it will increase ROA. This is due to the high CAR indicating that banks can use their capital well in generating profits.
Banks should manage and utilize their capital to be optimized so that it can generate good profits, but banks must continue to pay attention to the capital requirements held in operational activities in terms of financing to customers or in providing credit so that banks no longer need to reduce capital to pay for risks of losses that arise later.

Effect of NPL on ROA
From the test results on the NPL, variable produced that the NPL variable showed a negative result, but it was significant to ROA in BUMN banks in Indonesia. Thus, the hypothesis which states that the NPL variable has a significant effect on ROA, is accepted.
The results of the regression coefficient which shows a negative result means that if the value of NPL increases tends to result in a decrease of ROA. The results of this study are in line with the existing theories, which state that NPL have a negative effect on ROA, namely, the higher of NPL value, the profit received by banks will decrease, and vice versa. if NPL decreases, ROA will increase. NPL reflects a credit risk, namely, the smaller the NPL, the smaller the risk assumed by the bank for disbursed loans.

Effect of LDR on ROA
From the test results on the LDR variable, it is produced that the LDR variable shows negative and insignificant results on ROA of Soe Banks in Indonesia. Thus, the hypothesis which states that the LDR variable has a significant effect on ROA, is rejected.
From the results of the regression coefficient shows a negative result which means that the increased LDR value will tend to reduce ROA, because the higher LDR can be interpreted that banks cannot fulfill their obligations in providing loans. A high LDR, in this case, does not exceed a predetermined limit, it will increase profits derived from interest income.
LDR shows how far the bank's ability to repay withdrawals of funds by depositors by relying on loans provided as a source of liquidity. The additional credit provided by banks will have the potential to provide a higher rate of return on interest. Considering the source of bank revenue comes from the difference between loan interest and deposit interest. However, excessive lending will increase the risk exposure faced by banks. Therefore, banks also need to be selective in lending because besides providing credit in the form of interest income, improper lending can also trigger problem loans.

E. Conclusion and Suggestion
1. Conclusion a) CAR variable has no significant effect on ROA of state-owned banks in Indonesia. b) The NPL variable has a significant effect on ROA of state-owned banks in Indonesia. c) LDR variable has no significant effect on ROA of state-owned banks in Indonesia. d) Variable CAR, NPL and LDR jointly (simultaneously) significantly influence ROA of Soe Banks in Indonesia.

Suggestion
a) a) CAR, NPL, and LDR have a significant effect on ROA, the bank should keep the LDR level in accordance with the requirements set by Bank Indonesia, keep the NPL level as low as possible by increasing the total loan by taking into account the customer's qualifications and using optimal capital, so CAR can increase. b) b) For further researchers, this study still has many limitations, including many internal factors that are not included as research independent variables and Time Series which are still too short, so it hopes that further research will be able to complete the limitations of this study.