A Systematic Literature Review of Liquidity, Asset Quality, Efficiency, and Solvability of Profitability on Foreign Bank

Arie Dwi Kurniawati

Abstract


An assessment of the performance of a foreign bank can be done by analyzing its financial statements. Financial performance of foreign banks in Indonesia when viewed from ROA has not been satisfactory. The aim of this study is to analyze whether the LDR, NPL, BOPO, and CAR have significant influence simultaneously and partially to ROA foreign banks. The paper is conceptual and qualitative in nature. This study examines 8 previous studies that discussed the effect of liquidity, asset quality, efficiency and solvability of profitability in banks.The Study followed a descriptive research design and used secondary data obtained from the company annual reports and partly from the foreign bank. There are one basic theory about signaling theory and previous research found some propositions : 1) LDR have significant effect to ROA, 2) NPL have significant effect to ROA, 3) BOPO have significant effect to ROA, 4) CAR have significant effect to ROA. The implication of this research can be used as input for banks in managing business risk in an effort to obtain the expected level of profit

Keywords


liquidity; asset quality; efficiency; solvability

Full Text:

PDF

References


V. Rivai, S. Basir, S. Sudarto, and A. P. Veithzal, Commercial Bank Management Manajemen Perbankan. Jakarta, Indonesia: Raja Grafindo Persada, 2013.

E. A. Al-Homaidi, M. I. Tabash, N. H. S. Farhan, F. A. Almaqtari, and D. McMillan, “Bank-specific and macro-economic determinants of profitability of Indian commercial banks: A panel data approach,” Cogent Econ. Financ., vol. 6, no. 1, pp. 1–6, 2018, doi: 10.1080/23322039.2018.1548072.

S. S. Harahap, Analisis Kritis atas Laporan Keuangan. Jakarta, Indonesia: Raja Grafindo Persada, 2015.

R. Addillah, M. N. Hosen, and S. Muhari, “The determinants factor of islamic bank’s profitability and liquidity in Indonesia,” Knowl. Horizons - Econ., vol. 8, no. 2, pp. 140–147, 2016.

N. Salike and B. Ao, “Determinants of bank’s profitability: role of poor asset quality in Asia,” China Financ. Rev. Int., vol. 8, no. 2, pp. 216–231, 2018, doi: 10.1108/CFRI-10-2016-0118.

J. C. Sumanti and M. Mangantar, “Analisis kepemilikan manajerial, kebijakan hutang profitabilitas terhadap kebijakan dividen dan nilai perusahaan pada perusahaan manufaktur yang terdaftar di BEI,” J. EMBA J. Ris. Ekon. Manajemen, Bisnis dan Akunt., vol. 3, no. 1, pp. 1141–1151, 2015, doi: 10.35794/EMBA.V3I1.7928.

A. Sulieman Alshatti, “Determinants of banks’ profitability – the case of Jordan,” Invest. Manag. Financ. Innov., vol. 13, no. 1, pp. 84–91, 2016, doi: 10.21511/imfi.13(1).2016.08.

A. T. Yahya, A. Akhtar, and M. I. Tabash, “The impact of political instability, macroeconomic and bank-specific factors on the profitability of Islamic banks: an empirical evidence,” Invest. Manag. Financ. Innov., vol. 14, no. 4, pp. 30–39, 2017, doi: 10.21511/imfi.14(4).2017.04.

L. Lemiyana and E. Litriani, “Pengarih NPF, FDR, BOPO terhadap Return On Asset (ROA) pada Bank Umum Syariah,” I-ECONOMICS A Res. J. Islam. Econ., vol. 2, no. 1, pp. 31–49, 2016.

M. Nohong, “Strategic environment and bank performance; (Empirical study of bank listed in Indonesian stock exchange period 2011-2015),” J. Econ. Bus. Account. Ventur., vol. 19, no. 3, pp. 325–334, 2017, doi: 10.14414/jebav.v19i3.767.




DOI: http://dx.doi.org/10.12962/j23546026.y2020i1.8642

Refbacks

  • There are currently no refbacks.


View my Stat: Click Here

Creative Commons License
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.