Determinants of Banking Capital and it’s Impact on Financial Intermediation (Study in Regional Development Bank in Indonesia)
Herry Achmad Buchory
Herry Achmad Buchory, Lecturer, EKUITAS Business School, Bandung, West Java, Indonesia.
Manuscript received on 22 April 2019 | Revised Manuscript received on 05 May 2019 | Manuscript Published on 17 May 2019 | PP: 31-37 | Volume-8 Issue-1S May 2019 | Retrieval Number: A10050581S19/2019©BEIESP
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© The Authors. Blue Eyes Intelligence Engineering and Sciences Publication (BEIESP). This is an open access article under the CC-BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/)
Abstract: This is to analyze the determinants of banking capital including assets growth (AG), credit growth (CG), capital growth (CapG), credit risk and profitability. And its impact on financial intermediation. Banking capital is measured by capital adequacy ratio (CAR), credit risk is measured by non performing loans (NPLs) and loans losses reserve (LLR), profitability is measured by return on equity (ROE) and net interest margin (NIM), financial intermediation is measured loans to deposit ratio (LDR). The method used is descriptive and verification method, with secondary data from the financial statements 15 Regional Development Bank in Indonesia period 2011-2016. The data analysis technique used is multiple linear regression, while hypothesis testing uses T – test to examine the effect of partial independent variables and F – test to examine the effect of independent variables simultaneously. Based on the research results, it is concluded that partially, AG, CG, NPLs have negative and significant effect on CAR; CapG has positive and significant effect on CAR; While LLR, ROE, NIM have negative effect but not significant on CAR; Simultaneously, AG, CG, CapG, NPLs, LLR, NIM and ROE have significantly effect on CAR. And CAR has positive and significant effect on LDR.
Keywords: Assets Growth, Banking Capital, Credit Growth, Financial Intermediation, Loans Losses Reserve, Non-Performing Loans, Net Interest Margin, Return on Equity.
Scope of the Article: e-governance, e-Commerce, e-business, e-Learning