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Web of Proceedings - Francis Academic Press
Web of Proceedings - Francis Academic Press

Effects of Credit Risk Management to the Financial Performance of Commercial Banks in the Indonesian Stock Exchange

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DOI: 10.25236/edssr.2020.066


Dela Efifania, Jianmu Ye

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Dela Efifania


The purpose of this study is to analyse the effect of credit risk management on the financial performance of 30 listed Indonesian stock exchange trading banks. The research aimed to analyse patterns in how commercial banks focused on foreign and non-foreign exchange categories demonstrated the effects of credit risk financial performance from 2015-2019 on. Return on Assets (ROA) and Return on Equity (ROE) were the measurement predictor variables for financial performance, while loan deposit ratio (LDR), capital adequacy ratio (CAR) and non-performing loans (NPL) utilized for credit risk indicators. A research method used in this study is causal associative analysis. The research also used the process of deliberate sampling to assess the sample size. Secondary data collected from has deployed in this study. Multiple regression analysis used in this study in order to analyse panel data. The impact of credit risk management on financial performance has positively influenced and significantly affected by the LDR, ROA, and ROE of the stock exchange of banks as the finding results of the study indicates. In the other hand, the CAR and NPL have an indirect and important influence on the financial performance of credit risk management. In this study, the finding also shows that banks, in particular, focused more on the loan deposit ratio, asset return, and equity return to boost successful risk management of their financial performance operations.


Credit risk performance, Loan deposit, Capital adequacy, Non-performing loan, Return on equity