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Research Paper | Management | Indonesia | Volume 10 Issue 10, October 2021

The Effect of Financial Ratios on Bank Capital at PT Bank Danamon, Tbk

Lina Fathina

Abstract: This study aims to see the effect of Return on Equity (ROE), Net Interest Margin (NIM), Operating Costs to Operating Income (BOPO), and Loan to Deposit Ratio (LDR) on the Capital Adequacy Ratio (CAR). The unit of analysis used in this study is PT Bank Danamon, Tbk for the period 2009 - 2016. The sample used in this study was taken from the Quarterly Financial Statements of PT Bank Danamon, Tbk for the period of 2009 the first quarter to 2016 the second quarter. The analytical tool used is multiple linear regression method and hypothesis testing. The results showed that the LDR variable had no significant effect on CAR with a significance level of 0.363, while the ROE, NIM, and BOPO variables had a significant effect on CAR with a significance level of 0.007; 0.003; and 0.046. Together the four variables contributed 34.3% to the CAR and the remaining 65.7% with other variables.

Keywords: Return on Equity, ROE, Net Interest Margin, NIM, Operating Costs to Operating Income, BOPO, Loan to Deposit Ratio, LDR, Capital Adequacy Ratio, CAR

Edition: Volume 10 Issue 10, October 2021,

Pages: 432 - 435