THE EFFECT OF CAPITAL ADEQUACY RATIO (CAR) AND NON PERFORMING LOAN (NPL) ON PROFITABILITY (ROA)
Keywords:Capital Adequacy Ratio, Non Performing Loans and Return on Assets.
The main activity of a bank is to collect funds and then channel them back to
the public in the form of credit. The purpose of the bank in channeling these
funds is to obtain revenue in the form of increased income if the funds are
channeled properly through credit. The better the credit is distributed, the
better it will be to have a good effect on profitability, namely increasing bank
income. If the credit is substandard to default, on the contrary, it will reduce
the bank’s profitability. As well as reserves to cover losses at the bank are
increasing. The purpose of this study is to determine the extent to which the
Capital Adequacy Ratio and Non Performing Loans affect bank profitability.
This research was conducted using multiple linear regression analysis on book
bank 4, namely, Bank BRI, Bank BCA, Bank BNI and Bank Mandiri for the
The results of research simultaneously Capital Adequacy Ratio (CAR) and Non
Performing Loans (NPL) on Profitability (Return on Asset / ROA) show
significant results because the significance value is 0.00 <0.05 and partially
there is no significant influence between the Capital Adequacy Ratio ( CAR) on
Profitability (ROA) with a significance value of 0.345> 0.05 and there is a
significant negative effect between Non Performing Loans (NPL) on
Profitability (ROA) with a significance of 0.00 <0.05.
Keywords: Capital Adequacy Ratio, Non Performing Loans and Return on