Analysis of External and Internal Factors on Banking Net Interest Margin in Indonesia During 2019 - 2021 Erik Sopian(a*), Nugraha (b) , Imas Purnamasari (c)
a) Student of Doctor Management Program Universitas Pendidikan Indonesia. Jalan Dr. Setiabudi 229 Bandung
(eriksopian[at]upi.edu)
b) Lecturer of Doctor Management Program Universitas Pendidikan Indonesia. Jalan Dr. Setiabudi 229 Bandung
(nugraha[at]upi.edu)
c) Lecturer of Doctor Management Program Universitas Pendidikan Indonesia. Jalan Dr. Setiabudi 229 Bandung
(imaspurnamasari[at]upi.edu
Abstract
The purpose of this study is to determine the influence of external factors from banks which take indicators of GDP growth and inflation, while internal factors from banks, namely Equity to Asset Ratio (EA), Non Performing Loans (NPL), Loan to Deposit Ratio (LDR), Bank Size and Operating Costs and Operating Income (BOPO) which affect the Net Interest Margin (NIM) of banking in Indonesia in 2019 - 2021. The research sample consisted of 40 Commercial Banks which were taken by the census method and took the entire population as a sample using the Linear Regression Analysis technique Multiply with secondary data from commercial bank financial reports for the period 2019 - 2021. The results show that EA, LDR, Bank Size and BOPO have a significant positive effect on NIM while NPL has a negative but not significant effect on NIM. External factors GDP growth and inflation have a positive effect but not significant to NIM. This is because in the period 2019 - 2021 Indonesia experienced a slowdown in economic growth and tended to decline due to Covid - 19 and fluctuations in the NIM. The sharp decline in inflation has not had a significant effect on NIM because banks have implemented several strategies combined with a mix of several policies with the government.
