ANALYSIS OF PROFIT GROWTH OF PUBLIC BANKING IN INDONESIA AFTER MERGER PROCESS USING SOLVABILITY, RENTABILITY AND LIQUIDITY RATIO (CASE STUDY OF PERMATABANK)

Abstract

This research is aimed to examine the effect of capital adequacy ratio (CAR), net interest margin (NIM), operating income to operating expense (OEOI), and loan to deposit ratio (LDR) toward banking performance measured by profit growth of PermataBank after the merger process in 2002. The researcher chooses profit growth as dependent variable because it is one of the important indicator in assessing the performance and level of soundness of banking company. On the other hand, CAR, NIM, OEOI, and LDR are chosen to represent solvability, rentability and liquidity ratio.

The samples used in this research are the financial statements of PermataBank which consist of 30 quarterly financial statements from March 2002 to June 2009. PermataBank selected as the research object because it is one of the merged bank in the era of 2000. So the data was not too outdated and could meet the minimum requirements to do a regression analysis (30 samples).

The test for this research is done in two steps. The first step is to test the simultaneously effect of all independent variables toward the dependent variable by using F test. The second step is to test the partially effect of each independent variables toward the dependent variable by using t test. Both test are done by using multiple regression models through SPSS 16.0 statistical software.

The research results showed that CAR, NIM, OEOI, and LDR are simultaneously affecting the profit growth of PermataBank. On partially basis, NIM and OEOI it is found that both of them have significant effect toward the Profit growth of PermataBank. While the other independent variable, CAR and LDR, are found do not have significant effect toward the profit growth of PermataBank.