Analysis of the Impact of Good Corporate Governance and Bank Fundamentals to the Financial Performance of Banking Institutions in the Indonesian Stock Exchange (BEI)

Abstract

This paper analys the impact of good corporate governance and bank fundamentals to the  financial performance of banks. The airm of this research is to give empirical proof and Determine whether good corporate governance represented by some of independent board of commissioner, the audit committee and risk monitoring committee and bank fundamentals can be indicated by the increase of in total assets, loan to deposit ratio (LDR) and return on equity of previous year  also Significantly Affect to  financial performance of banks.This study uses statistical and mathematical  analysis with financial performance represented by the ROE as the dependent variable and  independent board members, audit committee, risk monitoring committee, increase of in total assets as well as loan-to-deposit ratio and return on equity of previous year as an independent variable. This research usen 19 banks listed on the Indonesia Stock Exchange from year 2007 to year 2012.The result of this study shows that good corporate governance and bank fundamentals simultaneously significantly affect bank performace. Increase in total assets and return on equity of previous year significantly affect to individually bank performance.

Keywords: GCG, Bank Fundamentals, Financial Performance of Banks.