Determination Factor of Capital Adequancy Ratio (CAR) Conventional Comercial Banks in Indonesia that used on The Indonesian Stock Exchange Period 2010-2015

Abstract

The issue that is the focus of this study is that, in recent times, the Indonesian economy has experienced ups and downs, ranging from the continued weakening of the rupiah against the U.S. dollar to a decline in the Consumer Price Index (CPI). All business sectors have been affected, including the banking sector. For the banking sector, it is crucial to maintain adequate capital to anticipate potential economic crises. The objective of this study is to determine the significant relationship between Return on Assets (ROA), the ratio of operating expenses to operating income (BOPO), Non-Performing Loans (NPL), the loan-to-asset ratio (LTA), economic growth (GROWTH), and Bank Size (SIZE) on the Capital Adequacy Ratio (CAR) of conventional commercial banks in Indonesia listed on the Indonesia Stock Exchange during the 2010–2015 period. The method used in this study is the Fixed-Effect Method with the Eviews 6 program. The research sample was drawn from banking annual report data accessed via the website www.idx.co.id. The results of this study indicate that BOPO, Economic Growth, and Bank Size significantly influence the CAR of conventional commercial banks in Indonesia. Meanwhile, ROA, NPL, and LTA have no effect on CAR.