COMPARISON RESEARCH CHINA - INDONESIA: STATE-OWNED COMMERCIAL BANKS’ SOUNDNESS AND MACROECONOMICS FACTORS

Abstract

This research focuses on the discussion of the significant relationship between banks’ soundness and macro economy. According to this topic, there are two kinds of variables and one is the banks’ soundness that is analyzed by using the CAMEL model and another one is about the macroeconomics factors including GDP growth rate, inflation of consumer price and interest rate. The researcher chooses to use quantitative research and the data of this research are about two developing states, China and Indonesia and are collected from the Bank Score, World Bank Data, annual reports of the banks and the Central Banks official website in the year of 2014 and 2015. The data analysis uses data panel General Least Square (GLS) regression to generate and the general least square are used to analyze these data. The statistic results show that one side is that GDP growth rate, inflation of customer price and interest rate have the significant influence to CAR and GDP growth rate has the significant influence to NIM and another side is that NPL, CIR and LDR have the significant influence to the GDP growth rate and CIR, NIM and LDR have the significant influence to the inflation of consumer price.Besides, the research results also show that the state-owned commercial banks’ soundness is better than Indonesian and the macroeconomic condition in China is better than Indonesia.