RGEC Bank’s Performance and Value:

Evidence From Indonesia

DOI

10.2991/aebmr.k.201116.043How to use a DOI?

Keywords

bank assessment system, bank health system, NPL, CAR, firm value

Abstract

This research purposes to explore the influence of the healthiness of Indonesian commercial banks to enhance the banks’ value using RGEC (Risk, Governance, Earning and Capital) approach. Bank plays a significant role on Indonesian economics; therefore, the sustainability of its value is crucial. Shareholders decide to invest in bank sector due to the financial performance of the company as well as the non-financial information. RGEC approach is one of the methods to measure the bank health level that need to be explored. As an explanatory research using a quantitative approach, this study measures the bank health level using Non-Performing Loan (NPL), Loan to Deposit Ratio (LDR), Return on Assets (ROA), Net Interest Margin (NIM) and Capital Adequacy Ratio (CAR) while Firms value is measured by Tobin’s Q. 29 Indonesian commercial banks which listed on the Indonesian Stock Exchange in 2015-2019 were selected as samples. The result shows that simultaneously, bank health level has a significant contribution on the improvement of banks value, even though only ROA and CAR partially provide a significant partial influence.

Copyright

© 2020, the Authors. Published by Atlantis Press.

Open Access

This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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TY  - CONF
AU  - Cacik Rut Damayanti
AU  - Muhammad Sahidu Saifun
AU  - Mukhibatul Hikmah
PY  - 2020
DA  - 2020/11/17
TI  - RGEC Bank’s Performance and Value:
BT  - Proceedings of the 2nd Annual International Conference on Business and Public Administration (AICoBPA 2019)
PB  - Atlantis Press
SP  - 215
EP  - 218
SN  - 2352-5428
UR  - https://doi.org/10.2991/aebmr.k.201116.043
DO  - 10.2991/aebmr.k.201116.043
ID  - Damayanti2020
ER  -