The Effect of Risk Management on Profitability: Empirical Study of Banking Companies Listed in Indonesian Stock Exchange 2019-2023
DOI:
https://doi.org/10.22441/indikator.v8i3.28287Keywords:
Return on Assets (ROA) Capital Adequacy Ratio (CAR) Non Performing Loans (NPL) Loan to Deposit Ratio (LDR)Abstract
This study aims to examine the influence of Capital Adequacy Ratio (CAR), Non-Performing Loans (NPL), and Loan to Deposit Ratio (LDR) on Return on Assets (ROA). The research utilizes a sample of conventional banking companies listed on the Indonesia Stock Exchange (IDX) during the period 2019-2023. The sample selection method used is purposive sampling with a sample of 10 conventional banks. The results indicate that partially, Capital Adequacy Ratio (CAR) and Loan to Deposit Ratio (LDR) do not affect Return on Assets (ROA), while Non-Performing Loans (NPL) have a significant negative influence on Return on Assets (ROA). Risk management can serve as a mechanism to address profitability-related issues by maintaining the company's capital levels, and investors should pay closer attention to industry risks when investing in banking companies.References
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