THE INFLUENCE OF PROFITABILITY AND LIQUIDITY TO CAPITAL ADEQUACY (CASE STUDY IN STATE AND PRIVATE BANKS LISTED ON IDX FROM JANUARY 2010 TO JUNE 2012)

Abstract

The researcher would like to present a research regarding the influence of profitability and liquidity to capital adequacy (case study in state and private banks from January 2010 to June 2012). Based on this research, researcher tries identifying the influence between Net Interest Margin (NIM) and Cost Income Ratio (CIR) as profitability instruments, Loan to Deposit Ratio (LDR) as liquidity instrument to Capital Adequacy Ratio (CAR) as measurement of capital. Furthermore, there are eight commercial banks that include of state and private bank, those are: PT Bank Mandiri Tbk, PT BRI Tbk, PT BNI Tbk, PT BTN (Persero) Tbk, PT Bank Central Asia Tbk, PT CIMB Niaga Tbk, PT Bank Danamon Tbk and PT Bank Permata Tbk. Data used in this research is secondary data was obtained from the financial report of Indonesia Stock Exchange (IDX) publications and bank reports through the website which is quarterly data from 1st Quarter of 2010 to 2ndQuarter of 2012.This research used panel data which using multiregression model where those are data had been tested by using the classic assumption test, such as: normality, autocorrelation, multicollinearity, and heteroscedasticity tests.The classic assumption tests indicate that theavailable data have fulfill the condition to use multiregression model. Empirical evidence show as NIM, CIR, and LDR are not significant entirely toward CAR. However, in partially NIM is significant toward CAR,while on the other hand CIR and LDR are not significant toward CAR.