Articlediamond2021

The effect of loan-loss provision, non-performing loans and third-party fund on capital adequacy ratio

Mulyanto Nugroho · Donny Arif · Abdul Halik

28 citations0/0 files storedAccounting

No readable copy stored yet — this record is metadata only.

No open-access location is known for this record yet.

Literature note Cite in a project Citation map

Banking stability, regulation, efficiency Financial Analysis and Corporate Governance Banking Sector Performance and Management

Abstract

This research was conducted in connection with the effective enactment of International Financial Accounting Standard IFRS 2020 to improve the concept of hedging accounting as well as basic measurement and classification of financial instruments. IFRS carries the concept of Expected loss backup which begins to acknowledge losses if there is a potential failure to pay even though it has not really happened, allowing the bank to form a larger loan-loss provision. The loan-loss provision is formed based on the number of failed pays in credits indicated by the ratio of Non-Performing Loans (NPLs). Fund distribution can be regulated by the Third-party Fund (TPF). The increasing number of loan-loss provisions and NPLs are feared to affect capital conditions for the bank. Therefore, the study aims to determine the partial and simultaneous influence of the loan-loss provision, Non-Performing Loans (NPLs), and third-party Fund (TPF) against the bank's capital adequacy ratio (CAR). The samples in this study are central government-owned banks, namely Bank Mandiri, Bank Negara Indonesia, Bank Rakyat Indonesia, and Bank Tabungan Negara period from 2011 to 2018. Data taken is a data time series of the quarterly financial statements published by the respective online website of the bank. The analysis used is a multiple linear regression analysis using SPSS Tools version 21 and Microsoft Excel. The results showed that a partial loan-loss provision had no significant effect on the bank's capital adequacy ratio, while the Non-Performing Loans (NPLs) and the Third-party Fund (TPF) were partially influential of the bank's capital adequacy ratio. Simultaneously the three independent variables have a significant effect on the dependent variable capital adequacy ratio (CAR).

Paper brief

Loading…

Cite this work

Citation unavailable for this work.

BibTeX RIS CSL-JSON

No public copy is stored for this record, so only the metadata is cited.

Citations in this library

Citation map →

Stored only when both papers are in the corpus — 28 citations exist upstream.

References

2015Are regulatory capital adequacy ratios good indicators of bank failure? Evidence from US banks 2019Are third-party assurances preferable to third-party comments for promoting financial accountability in environmental reporting?2020An integrated multi-criteria decision making model with Self-Organizing Maps for the assessment of the performance of publicly traded banks in Borsa Istanbul 2018A structural model of “alpha” for the capital adequacy ratios of Islamic banks 2020Effect of CAMELS Ratio on Indonesia Banking Share Prices

Explore the map →

Papers that cite the same references — the relational fallback while embeddings are still backfilling.

Imported from OpenAlex (CC0) — nothing here is generated.