Title:
THE EFFECT OF MODERATING CREDIT RISK ON THE INFLUENCE OF FIRM SIZE, LIQUIDITY, AND OPERATIONAL EFFICIENCY ON THE FINANCIAL PERFORMANCE OF REGIONAL DEVELOPMENT BANKS OF INDONESIA 2010- 2020

Authors:
Cut Dewi Shafira, Said Musnadi and Faisal

Abstract:
This study examines the credit risk moderating effect on the effect of firm size, liquidity, and operational efficiency on the financial performance of Regional Development Banks (BPDs) in Indonesia from 2010 to 2020. The population was BPDs in Indonesia. The sample was taken using the purposive sampling method, provides 18 banks. Data were analyzed through the panel data regression using the Eviews 12 application and MRA (Moderate Regression Analysis) tests. The results of hypothesis testing show that firm Size and LDR positively impact ROA, while Operational Efficiency has a negative impact, and NPL cannot moderate the impact of company size on ROA but can moderate the effect of LDR and Operational Efficiency on ROA. From these findings, it reveals that the model of increasing ROA at BPD in Indonesia is a function of increasing firm size and LDR and decreasing Operational Efficiency whereas NPL can strengthen the role of LDR and weaken the role of Operational Efficiency.