INFLUENCE OF BANKING HEALTH LEVELS BY USING THE RGEC METHOD FOR BANKING FINANCIAL PERFORMANCE

Abstract

This research tests and determines the effect of banking health using the RGEC method on banking financial performance. The object of this research is banking companies, especially Conventional Commercial Banks listed on the Indonesia Stock Exchange for the 2018-2022 period. The sample in this study used a purposive sampling method, with the number of samples in this study being 43 Conventional Commercial Banks. The dependent variable used is financial performance which is measured using Return on Assets (ROA), for the independent variables used are Risk Profile which is measured using Non-Performing Loans (NPL), Good Corporate Governance (GCG) which is measured using a composite or self-rating assessment, Earnings are measured using Net Interest Margin (NIM), and Capital is measured using the Capital Adequacy Ratio (CAR). The results of this research show that NPL has a significant negative effect on ROA, GCG and NIM have a significant positive effect on ROA, while CAR has no significant effect on ROA.