Analysis Of Comparative Performance Of Government Banks And Private Banks Listed On The Indonesia Stock Exchange Based On The Banking Financial Ratio For The 2010-2012 Period
Introduction
The banking industry plays a vital role in the economic development of a country, and the performance of government and private banks can have a significant impact on the overall economy. In Indonesia, the banking industry is dominated by government and private banks, which are listed on the Indonesia Stock Exchange (IDX). This study aims to analyze the comparative performance of government and private banks listed on the IDX based on the banking financial ratio for the 2010-2012 period.
Background
The banking industry in Indonesia has undergone significant changes in recent years, with the government and private banks playing a crucial role in the country's economic development. The government banks, which are owned and controlled by the government, have a significant presence in the banking industry, while private banks are owned and controlled by private individuals and companies. The performance of these banks can have a significant impact on the overall economy, and it is essential to analyze their performance to understand the differences in their strategies and performance.
Methodology
This study uses a comparative design to compare the average of two populations, namely 42 government and private bank companies registered on the IDX during the 2010-2012 period. The sample used in this study consists of 19 companies selected using the Purposive Sampling method. The data used in this study is secondary data obtained from the Bei website (www.idx.co.id), and data collection is carried out with documentation studies. The variables studied include:
Capital Adequacy Ratio (CAR)
The CAR is a ratio that shows the ability of banks to fulfill obligations and risks. This ratio is calculated by dividing the bank's capital by its risk-weighted assets.
Non-Performing Loan Gross (NPL Gross)
The NPL Gross is a ratio that shows the proportion of bad loans to the total credit given. This ratio is calculated by dividing the bank's non-performing loans by its total credit.
Return on Asset (ROA)
The ROA is a ratio that shows the level of bank profitability to total assets. This ratio is calculated by dividing the bank's net income by its total assets.
Loan to Deposit Ratio (LDR)
The LDR is a ratio that shows the proportion of credit given to third-party funds. This ratio is calculated by dividing the bank's credit given to third-party funds by its total deposits.
Data Analysis
The data analysis uses an independent T-test to test the average difference between government and private banks. The results of the analysis showed that there were significant differences between government and private banks in the Gross and ROA NPL variables. That is, government and private banks have different performance in terms of asset quality and profitability. Meanwhile, there is no significant difference in the CAR and LDR variables. This shows that government and private banks have similar strategies in terms of capital management and the use of funds.
Deeper Analysis
Differences in NPL Gross
Government banks tend to have a higher gross NPL compared to private banks. This can be caused by factors such as softer credit policies and focus on certain sectors.
ROA Difference
Private banks tend to have a higher ROA than government banks. This can be linked to higher operational efficiency and more aggressive investment strategies.
Conclusion
This study concluded that there were significant differences in the financial performance of government and private banks, especially in terms of the quality of assets and profitability. Although there is no significant difference in terms of capital management and the use of funds, this research provides valuable insight to understand the differences in strategies and performance between the two types of banks.
Implications
The results of this study have significant implications for stakeholders in the banking industry, such as investors, regulators, and banks themselves. Investors can use this result to make more appropriate investment decisions. Regulators can take advantage of these findings to develop more effective policies in overseeing and regulating the banking industry. The bank itself can use this information to improve their strategies and performance.
Limitations
It is essential to note that this research only focuses on the 2010-2012 period. Changes in economic conditions and banking policies can have an impact on bank performance in the future. Therefore, this study's findings may not be applicable to the current banking industry.
Future Research Directions
Future research can build on this study by analyzing the performance of government and private banks in different periods, such as the 2013-2015 period. Additionally, future research can also analyze the impact of economic conditions and banking policies on bank performance.
References
- Bei website (www.idx.co.id)
- Purposive Sampling method
- Capital Adequacy Ratio (CAR)
- Non-Performing Loan Gross (NPL Gross)
- Return on Asset (ROA)
- Loan to Deposit Ratio (LDR)
- Independent T-test
Appendices
- List of government and private banks used in this study
- Data collection and analysis procedures
- Results of the independent T-test analysis
Q: What is the main objective of this study?
A: The main objective of this study is to analyze the comparative performance of government and private banks listed on the Indonesia Stock Exchange (IDX) based on the banking financial ratio for the 2010-2012 period.
Q: What are the variables studied in this research?
A: The variables studied in this research include:
- Capital Adequacy Ratio (CAR)
- Non-Performing Loan Gross (NPL Gross)
- Return on Asset (ROA)
- Loan to Deposit Ratio (LDR)
Q: What is the sample size used in this study?
A: The sample size used in this study consists of 19 companies selected using the Purposive Sampling method.
Q: What is the data source used in this study?
A: The data source used in this study is secondary data obtained from the Bei website (www.idx.co.id).
Q: What is the data analysis method used in this study?
A: The data analysis method used in this study is an independent T-test to test the average difference between government and private banks.
Q: What are the findings of this study?
A: The findings of this study show that there are significant differences between government and private banks in the Gross and ROA NPL variables. However, there is no significant difference in the CAR and LDR variables.
Q: What are the implications of this study?
A: The implications of this study are that investors can use this result to make more appropriate investment decisions, regulators can take advantage of these findings to develop more effective policies in overseeing and regulating the banking industry, and banks themselves can use this information to improve their strategies and performance.
Q: What are the limitations of this study?
A: The limitations of this study are that it only focuses on the 2010-2012 period, and changes in economic conditions and banking policies can have an impact on bank performance in the future.
Q: What are the future research directions?
A: Future research can build on this study by analyzing the performance of government and private banks in different periods, such as the 2013-2015 period. Additionally, future research can also analyze the impact of economic conditions and banking policies on bank performance.
Q: What are the references used in this study?
A: The references used in this study include:
- Bei website (www.idx.co.id)
- Purposive Sampling method
- Capital Adequacy Ratio (CAR)
- Non-Performing Loan Gross (NPL Gross)
- Return on Asset (ROA)
- Loan to Deposit Ratio (LDR)
- Independent T-test
Q: What are the appendices used in this study?
A: The appendices used in this study include:
- List of government and private banks used in this study
- Data collection and analysis procedures
- Results of the independent T-test analysis
Q: What is the conclusion of this study?
A: The conclusion of this study is that there are significant differences in the financial performance of government and private banks, especially in terms of the quality of assets and profitability.