THE EFFECT OF BANK SPECIFIC VARIABLES TOWARD THE STOCK RETURN OF 15 INDONESIAN PUBLIC LISTED BANKS FOR THE PERIOD OF 2010-2014

• Main Author: Wijaya, Ariesto
• Format: Final Project
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/72302
• Institution: Institut Teknologi Bandung

This paper aims to examine the impact of some bank specific variables and macroeconomic toward the Stock Return of 15 Public Listed Banks in Indonesia. Levin (1999) on his research noted that efficiency of bank intermediary can affect economic growth thus enhance the country’s wealth and well-being of its citizen. One of the most common used indicators to measure Bank performance is Stock Return. Banking sector has been one of the top players in Indonesia’s Capital Market. It is essential to see what factors in the fundamental side of the bank is actually affecting the prices and hence the stock return of commercial bank in Indonesia listed in Indonesia Stock Exchange (BEI). Understanding the factors will enable the banks to focus on which aspect to be their priority to improve. Data analysis for this paper uses Microsoft Excel and Econometric Views (Eviews). Data analysis was done using ordinary least square with Panel Data Model to estimate the sensitivity of variables affecting the Stock return of the 15 public listed banks in Indonesia. Some factors contribute positively to the increase in bank’s Stock Return: Return on Equity, Net Interest Margin, Inflation, and Implicit Cost. While there are some factors have negative effect: Non Performing Loan, Pre-provision profit, Capital Adequacy ratio, and also Exchange Rate. The result of the research is expected to increase understanding of Indonesia Bank’s Stock return and to Support previous Studies. Therefore it can be beneficial for policy makers in the Banking Industry.