Strategic Partnership in West Java Government Rural Banking

The performance of the banking sector, particularly in Rural Banking (BPR), is influenced by competition and resource constraints, especially after the regional government acquired BPR. The bank faces performance issues caused by internal and external factors, requiring continuous monitoring of its environment to identify opportunities, threats, strengths, and weaknesses. This study aims to evaluate the impact of a partnership strategy on BPR performance in West Java, using structural equation modelling (SEM) as the research methodology. A partnership strategy is identified as a potential solution to mitigate competition and resource limitations. The research design includes a population of 120 executive officers and managers of regional government-acquired BPR banks. Data collection and analysis were conducted to understand the relationship between the partnership strategy and performance. Data was analyzed using AMOS 22 software and the SEM approach. The findings reveal that implementing the partnership strategy dimensions, including collaboration, resource sharing, and innovation, significantly improves the performance of BPR banks post-merger. These findings address key challenges in enhancing operational efficiency, financial performance, and market competitiveness. This study provides practical recommendations for regional government-owned BPR banks to optimize their partnership strategies in response to internal and external challenges. It also highlights the importance of aligning partnership strategies with organizational goals to maximize effectiveness. The findings contribute to broader insights into improving performance in the banking industry, especially in post-merger scenarios, offering valuable lessons for a similar institution.