Intervening Variable CAR in the ROA Profitability Model: Banking Company on Indonesia Stock Exchange (IDX)

Abstract

The purpose of this study is to explain the banking profitability model of its determinants either directly or indirectly through intervening variables by using the influence and relationship between financial ratios. Conventional banking companies listed on the Indonesia Stock Exchange (IDX) are the object of research with a cross-sectional sample of 29 companies in an eight-year time series. The results of the first research model with endogenous variable Capital Adequacy Ratio (CAR), exogenous variable NIM, NPL and INF partially have a significant effect on CAR, while BOPO, LDR have an insignificant effect. The results of the determinant coefficient in this model can be explained in Adjusted R-squared 67.52%. In the results of the second research model, the exogenous variables NIM, NPL, INF and CAR partially have a significant effect on ROA, while BOPO, LDR have an insignificant effect. The results of this second model, the level of the determinant coefficient that can be explained in Adjusted R-squared is 77.91%.