BANK FUNDS MANAGEMENT AND ITS EFFECTS ON NET INTEREST MARGIN

Budiwati, Hesti (2020) BANK FUNDS MANAGEMENT AND ITS EFFECTS ON NET INTEREST MARGIN. International Journal Of Accounting and Management Research, 1 (1). pp. 38-45. ISSN 2721-1126

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Abstract

The objective of this study is to examine the effect of bank fund management on Net Interest Margin. The management of bank funds in this study was measured using Interest Expense Ratio, Interest Rate Risk Ratio and Loan to Deposits Ratio. The three measures of bank fund management are tested for their effect on the Net Interest Margin either partially or simultaneously. The study was conducted on rural banks in Indonesia. The samples taken were 65 banks using quarterly financial reports for 4 quarterly periods for each bank. With purposive sampling technique obtained a sample of 260 financial statements of Rural Banks. The method used is multiple linear regression analysis with previous classical assumption tests and followed by hypothesis testing. The results stated that the Interest Expense Ratio, Interest Rate Risk Ratio and Loan to Deposits Ratio had a significant effect both partially and simultaneously on Net Interest Margin with a positive relationship direction. This study also gives the results of the regression equation Y=-0.179 +0.005 X 1 + 0.008 X2 + 0.089 X3 . Overall, 15.7% of net interest margin in rural bank in Indonesia can be explained by Interest Expense Ratio, Interest Rate Risk Ratio and Loan to Deposits Ratio. While the remaining 84.3% of net interest margin are affected by other variables. The future study is expected to examine other variables that affect bank profits. Keywords: IER, IRRR, LDR, NIM.

Item Type: Article
Subjects: H Social Sciences > HB Economic Theory
Depositing User: Mr rouf abdur
Date Deposited: 18 Jan 2021 02:06
Last Modified: 18 Jan 2021 02:11
URI: http://repository.itbwigalumajang.ac.id/id/eprint/943

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