ANALYZING FINANCIAL PERFORMANCE OF BUKU III BANKS IN INDONESIA USING RBBR METHOD

• Main Author: Fannywaty
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/46614
• Institution: Institut Teknologi Bandung

The economic crisis of 1997/1998 and 2008 gives an important lesson to the world banking industry, especially in Indonesia. Bank liquidity difficulties, worse asset quality, and capital shortage are the main factors of the banking crisis at that time. Critical situation in the present such as stagnant economic growth and digitalization era make banks obliged to maintain and improve their soundness by applying the principle of prudence and risk management in carrying out their business activities, including conducting periodic self-assessments of their soundness and taking corrective measures effectively following Bank Indonesia Circular Letter No.13/24/DPNP 2011. This study aims to analyze the financial health and performances of PT Bank Tabungan Pensiunan Nasional, Tbk (BTPN) for five years period from 2014 – 2018 compared to eight public listed non-stated-owned BUKU III banks in Indonesia using Risk-Based Bank Rating (RBBR) method. The RBBR method assesses aspects of Risk Profile, Good Corporate Governance, Earnings, and Capital. The result of this study shows that compared to its close competitors in public listed non-stated-owned BUKU III banks, BTPN was superior in terms of credit risk profile, earnings, and capital performances during the period 2014 to 2018. BTPN is ranked first among the nine public listed non-stated-owned BUKU III banks in Indonesia with the lowest average NPL ratio and the highest average ROA ratio, NIM ratio, and CAR during the five years covered. BTPN categorized as very healthy related to credit risk profile which is being represented by NPL ratio, earnings factor which is being represented by ROA and NIM ratio and also capital factor which is being represented by CAR and quite healthy related to liquidity risk which being represented by LDR according to Circular Letter of Bank Indonesia No. 13/24/DPNP 2011. This study recommends that BTPN should reduce its Non-Performing Loan through strengthening credit analysis and centralized collection unit. BTPN should also increase its funding through digital funding products and applications to mitigate liquidity risk.