THE EFFECTS OF RISK-BASED BANK RATING AND DIVIDEND ON STOCK RETURN: EVIDENCE OF BUKU II BANKS IN INDONESIA

• Main Author: Ferrari, William
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/65599
• Institution: Institut Teknologi Bandung

As a financial service institution, banks play a significant role in sustaining and developing the country's economy. Moreover, the monetary crisis in 1998 and the global crisis in 2008 caused the banking industry to experience a decline in performance in terms of liquidity, asset quality, and lack of capital. In 2011, Bank Indonesia as the central bank, issued Bank Indonesia Regulation Number 13/1/PBI/2011 as the basis so that banks can assess their level of soundness using a risk-based approach both individually and on a consolidated basis. Therefore, banks are required to maintain and improve their level of soundness by implementing principles of prudence and risk management in carrying out business activities. The purpose of this study is to determine the relationship between the soundness of the bank by looking at the risk profile, income, and capital called the RBBR method, whether it was affecting stock returns in BUKU II banks. This research was conducted by taking data from the annual reports of BUKU II banks and annual stock returns from 2016 to 2021 using a multiple regression model, which was tested by statistical hypothesis testing. The results show that from the NPL, ROA, and NIM in the RBBR method have a significant effect on stock returns, while LDR, CAR, and DPS do not have a significant effect on stock returns. This result proves that investors do see the NPL, ROA, and NIM ratios as the basis for market sentiment to invest in BUKU II banks in this study.