ANALYSIS ON THE INFLUENCE OF SIZE, CAPITAL, LOAN, GROSS DOMESTIC PRODUCT, INTEREST RATE, AND EXCHANGE RATE TOWARDS RETURN ON ASSET (A CASE STUDY OF COMMERCIAL BANKS IN INDONESIA)

Abstract

This study is about to analyse the influence of internal and external factors towards Return on Asset of 18 commercial banks listed in IDX period 2009 – 2013. The problem stated in this research is about the fluctuation of financial ratios and external factors affecting profitability, strengthened by the occurrence of research gaps between theories and the actual empirical evidence in the banking industry. The object of this research is to analyse both the internal factors which are Size, Capital, Loan and the external factors which are Gross Domestic Product, Interest Rate, and Exchange Rate towards ROA of 18 commercial banks listed in IDX period 2009 – 2013. The methodology used in this study is quantitative research method using secondary data. The sampling method used is purposive sampling, with criteria of 18 commercial banks listed in IDX which provide annual audited financial statements along with the ratios that are relevant to the variables to be examined during period 2009 – 2013. The analysis of this research uses multiple linear regression analysis, with significance level of 0.05. The result shows that partially Size, Capital, and Loan have a positive significant influence towards ROA while GDP has a positive but insignificant influence along with Interest Rate, and Exchange Rate which have a negative and insignificant influence towards ROA. Simultaneously all of the independent variables significantly influence the ROA, with the coefficient of determinant in this research is 48.5%.