Analyzing the Impact of Financial Performance on Credit Allocation: A Contemporary Perspective
Keywords:
Banking, Credit Distribution, Financial PerformanceAbstract
This study investigates the impact of financial performance indicators, including Loan to Deposit Ratio (LDR), Capital Adequacy Ratio (CAR), Return on Assets (ROA), and Non-Performing Loans (NPL), on credit distribution among banks listed on the IDX during the 2018-2019 period. With a population of 45 IDX-listed banks, a purposive sampling method was employed to select 19 banks meeting predetermined criteria, resulting in a dataset comprising 38 observations. Secondary data from annual reports were analyzed using multiple linear regression in SPSS version 18.0. Findings reveal that LDR, CAR, and ROA positively and significantly influence credit distribution, while NPL exhibits a negative and insignificant impact. These results offer insights for bank management, prospective customers, and future research endeavors. This study contributes to understanding the intricate dynamics of credit allocation within the banking sector.
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