CAPITAL BUDGETING ANALYSIS FOR MOBILE BANKING AND INTERNET BANKING OF BANK CIPTA KARSA SYARIAH

• Main Author: Yohanes Wiseso, Brian
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/63513
• Institution: Institut Teknologi Bandung

Until mid-2021, Bank Cipta Karsa Syariah not yet has banking services through electronic channels. Due to customer requests, plus the pandemic conditions that limit out-of-branch service, the bank decided to make mobile and internet banking which the bank plan to release at the end of 2021. Before implementing the plan, Bank Cipta Karsa Syariah needs to ensure that the investment decisions taken will provide positive financial results for the company in the long term. A study was conducted with two types of tests, a feasibility study using the method of capital budgeting analysis and sensitivity analysis to obtain a clear projection of the financial performance of the new mobile and internet banking for the next five years. The study results show that the Net Present Value indicator returns positive. The Internal Rate of Return exceeds the Cost of Capital value. The cash flow is projected to return positive in the third year after the investment. In the next step in sensitivity analysis, the calculation identifies four financial factors that are the most sensitive in influencing the financial condition of the project: operating ratio, effective margin rate, average balance from new customers, and the financing-to-deposit ratio. These four factors have the lowest tolerance level, so it needs special attention from the management to be kept as close as possible to the initial assumptions so that the project's financial condition remains positive. By considering the two test methods, the conclusion that can be drawn is that the mobile and internet banking projects are feasible to continue. Bank Cipta Karsa Syariah also needs to set targets for new customers and their average balance and measure pirate metrics related to product effectiveness in customer activation and retention.