Journal of Applied Finance & Banking

Determinants of Bank Profitability with Size as Moderating Variable

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• Abstract

   

  This paper has objective to explore determinant of bank profitability with size as moderating variable. Internal ratio and macroeconomics variable are used to determine bank profitability. Return on Asset and Return on Equity are variable of bank profitability. Model Panel Data is used to determine bank profitability in Indonesia for period of 2007 to 2018. This research found that Net Interest Margin, Ratio of Operational Expenses to Operational Profit, Capital Adequacy Ratio and Loan to Deposits Ratio significantly affected profitability bank of return of Equity.  Fed Rate and Consumption of Cement significant affected bank profitability of return on asset. Net Interest Margin, Non-Performing Loan, Ratio of Operational Expenses to Operational profit, and Loan to Deposits Ratio significantly affected profitability bank of Return on Equity. Consumption of Cement significant affected bank profitability of Return on Equity. Asset as moderating variable with CAR, BOPO, Consumption of cement and Fed Rate have significant to affect bank profitability of return on assets. Asset with Consumption of cement  has and negative significant to affect bank profitability of Return on Equity.

  JEL classification numbers: G1, G21, E58

  Keywords: Profitability bank, Return on Asset, Return on Equity, Net Interest Margin, Non-Performing Loan, Capital Adequacy Ratio, Loan to Deposit Ratio, Oil Price, Exchange Rate, Fed Rate and Consumption of Cement.