The Effect of Camel Ratio in Predicting Financial Distress Conditions in Banking Companies Registered in Indonesia Stock Exchange (BEI)

Abstract

This research was conducted to analyze the effect of Capital Adequacy Ratio (CAR), Non Performing Loans (NPL), Net Interest Margin (NIM), Operational Costs Operating Income (BOPO), and Loan to Deposit Ratio (LDR) on Financial Distress. The banking sector listed on the Indonesia Stock Exchange (IDX) for the 2014-2017 period was chosen as the population used in this study. The sampling technique used is probability sampling. The number of samples used were 22 banks listed on the Indonesia Stock Exchange (IDX). The analysis technique used is panel data regression.The results of this study indicate that the Capital Adequacy Ratio (CAR), Non Performing Loans (NPL), Net Interest Margin (NIM), Operational Costs Operating Income (BOPO), and Loan to Deposit Ratio (LDR) simultaneously have a significant effect on Financial Distress . Based on partial testing, Capital Adequacy Ratio (CAR), Net Interest Margin (NIM), Loan to Deposit Ratio (LDR) and Operational Costs Operating Income (BOPO) have an effect on Financial Distress while Non Performing Loans (NPL) have no effect on Financial Distress .

Keywords: Financial Distress, CAR, NPL, NIM, BOPO, and LDR.

DOI: 10.7176/EJBM/12-18-10

Publication date:June 30th 2020