Irma, and Hadiwidjaya, Rini Dwiyani and Widiastuti, Yeni (2016) Assessing the Effect of Bank Performance on Profit Growth Using RGEC Approach. Review of Integrative Business and Economics Research, 5 (3). pp. 87-101.
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Abstract
Bank of Indonesia (BI) issued several regulations governing the assessment of a bank’s performance, including assessment by using CAMEL, later, CAMELS. Recently issued BI regulations No.13/1/PBI/2011 stipulated that the assessment of a bank’s performance must be based on RGEC—Risk Profile, Good Corporate Governance (GCG), Earnings and Capital. Although many researches examining the effect of bank performance on profit growth using CAMEL and CAMELS have been conducted in Indonesia, only a few have used the RGEC method as a proxy for bank performance and examine its impact on profit growth. The present work uses secondary data, such as annual reports and financial statements of banking companies listed in Indonesia Stock Exchange (BEI). Hypothesis testing is done using steps typically applied in SEM. The results show that risk profile, good corporate governance (GCG), earnings as well as capital, significantly affect growth with risk profile and capital exhibiting negative estimate values and a lower risk profile status of the bank enhancing growth in profit. It is shown that banking companies must fulfill the minimum capital and the amount of KPPM as required by the Bank of Indonesia. A bank unable to do so may be deemed to be in an unhealthy state. GCG and earning exhibit negative estimate values. The higher the level of GCG implementation in a bank, the higher is profit growth. If ROA increases, profits grow faster as performance is improved.
| Item Type: | Article |
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| Additional Information (ID): | 22/B0055.pdf |
| Uncontrolled Keywords: | banking, RGEC, performance level |
| Subjects: | 300 Social Science > 330-339 Economics (Ilmu Ekonomi) > 332.1 Banks (Bank, Perbankan) |
| Divisions: | Koleksi Digital > Artikel |
| Depositing User: | CR Cherrie Rachman |
| Date Deposited: | 23 Nov 2022 03:05 |
| Last Modified: | 23 Nov 2022 07:35 |
| URI: | http://repository.ut.ac.id/id/eprint/10111 |
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