THE ANALYSIS OF ENTERPRISE RISK MANAGEMENT, FINANCIAL PERFORMANCE AND MACROECONOMIC PERFORMANCE IN INDONESIAN AND CHINA BANKING INDUSTRY

Abstract

The purpose of this study is to analyze the impact of NIM, ERM and macroeconomics performance towards bank performance of state-owned commercial banks in Indonesia and China during 2016-2017. Indonesia and China are predicted to have crucial roles in global financial leader in the future due to huge population and recent financial performance. This study will compare NIM, ERM,macroeconomics performance and state-owned commercial banks’ performance between Indonesia and China. The findings show that even though China has better macroeconomics performance compared with Indonesia, but state-owned commercial banks in China have worse performance in term of management performance and earnings performance compared with state-owned commercial banks in Indonesia. Furthermore, this study implements data panel GLS regression – random effect by STATA. As Casu et al (2009) mention that macroeconomics performance has positive impacts towards bank performance, therefore this study analyze the impact of macroeconomics performance towards the bank performance with unit analysis of state-owned commercial banks in Indonesia and China. The statistics results show that GDP growth rate has negative impact towards bank performance.In short, this study shows that higher macroeconomics performance would not guarantee that state-owned commercial banks will have higher bank performance as well.