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The effect of interest rates, exchange rates and capital structure on banking profitability of BUMN and Private Go Public in Indonesia

Author

Listed:
  • Debby Wulandari

    (Master of Management, Universitas Islam Indonesia, Indonesia)

  • Agus Harjito

    (Lecturer, Department of Management, Universitas Islam Indonesia, Indonesia)

Abstract

This study aims to examine and analyze the influence of interest rates, exchange rates and capital structure on profitability in state-owned and private banking go public in Indonesia. This research is quantitative research based on the study of empirical rational principles. Collecting data using secondary data with purposive sampling technique, the sample consists of Commercial Banks Business Group (BUKU IV) with core capital > Rp 30 trillion. The data analysis technique used panel data regression analysis using EVIEWS version 11 software. The results showed that the interest rate had a positive and significant effect on banking profitability; Exchange Rate has a negative and significant effect on Banking Profitability; Capital Structure has a positive and significant effect on Banking Profitability; Interest Rate, Exchange Rate, and Capital Structure simultaneously have a positive and significant effect on Banking Profitability Key Words:State-owned and private banks, BUKU 4 Banks, Interest Rates, xchange Rates, Capital Structure (Debt to Equity Ratio), Profitability (Return on Asset)

Suggested Citation

  • Debby Wulandari & Agus Harjito, 2021. "The effect of interest rates, exchange rates and capital structure on banking profitability of BUMN and Private Go Public in Indonesia," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 10(3), pages 338-351, April.
    • Handle: RePEc:rbs:ijbrss:v:10:y:2021:i:3:p:338-351
    DOI: 10.20525/ijrbs.v10i3.1086
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    References listed on IDEAS

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    1. Michael Yeboah & Andras Takacs, 2019. "Does Exchange Rate Matter in Profitability of Listed Companies in South Africa? An Empirical Approach," International Journal of Energy Economics and Policy, Econjournals, vol. 9(6), pages 171-178.
    2. Md. Shakhaowat Hossin & Md. Fazlu Mondol, 2020. "Impact Of Exchange Rate Fluctuations On Financial Performance Of State-Owned Commercial Banks In Bangladesh: An Empirical Study," Noble International Journal of Economics and Financial Research, Noble Academic Publsiher, vol. 5(9), pages 92-101, September.
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