THE INFLUENCE OF CAPITAL ADEQUACY, CREDIT RISK, LIQUIDITY, OPERATIONAL COST, INCOME DIVERSIFICATION, FIRM SIZE AND OWNERSHIP STRUCTURE ON THE PROFITABILITY OF BANK
Abstract
This research aims to analyze the effect of Capital Adequacy, Credit Risk, Liquidity, Operational Cost, Income Diversification, Firm Size and Ownership Structure on the Bank’s profitability. The object of this research is the conventional commercial bank that listed at the Indonesia Stock Exchange (Bursa Efek Indonesia/BEI) from 2011 to 2015. This research used purposive sampling method which resulting of 16 conventional commercial banks as the sampel. The data used were secondary data with using a documentary method that obtained from BEI’s website and the Financial Services Otority (Otoritas Jasa Keuangan/OJK ’s) website. This research used multiple linear regression models and it used IBM statistic SPSS 21.0 software for analyzing the data.
The result showed that Capital Adequacy has no significantly effect on Profitability. Credit Risk and Liquidity also did not have significantly effect on profitability. Operational Cost has a negative significantly effect on profitability. Income Diversification has a positive significantly effect on profitability. Firm Size has a negative significantly effect on profitability. Ownership Structure has a positive significantly effect on profitability.