Analysis of the Effect of Loan to Deposit Ratio, Non-Performing Loan, and Capital Adequacy Ratio on Financial Performance of Banking Sub-Sector Companies on the Indonesia Stock Exchange

Banks are financial institutions that are authorized to collect and distribute funds to the public. Banks must be able to maintain the stability of their financial performance. Research was conducted to identify the factors that affect the bank’s financial performance. The research was conducted to determine the effect of LDR, NPL, and, CAR on the financial performance of banks listed on the IDX. This study untilizes secondary data sourced from financial reports or annual reports of banking sub-sector companies, obtained from the official IDX website, covering the period from 2018 tp 2022. The population of the banking sub-sector amounted to 47 companies. The technique used for sampling is non-probability sampling, namely purposive sampling. The criteria taken are companies that Initial Public Offering before 2018. Therefore 37 companies were obtained.
This study uses multiple regression analysis. The results of data analysis show that the LDR, ratio does not impact financial performance, while NPL and CAR have a negative effect on financial performance as measured using the return on assets ratio.