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Growing Science » Accounting » Indicators of financial distress condition in Indonesian banking industry

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Accounting

ISSN 2369-7407 (Online) - ISSN 2369-7393 (Print)
Quarterly Publication
Volume 8 Issue 1 pp. 27-36 , 2022

Indicators of financial distress condition in Indonesian banking industry Pages 27-36 Right click to download the paper Download PDF

Authors: Abdul Haris, Imam Ghozali, Najmudin Najmudin

DOI: 10.5267/j.ac.2021.6.009

Keywords: Financial distress, Banking sector in Indonesia, Credit risk, Profitability, Liquidity

Abstract: This study conducts the theme of The Causes of Financial Distress conditions by samples from Indonesian banking sector registered in the Financial Services Authority of Indonesia within the period of 2015-2019. The title of this study: "Indicators of Financial Distress condition in Banking sector in Indonesia” during the period of 2015-2019" with a multiple correlation approach. The purpose of this study is to determine the effect of leverage of Credit Risk, CAR, ROA, and LDR to the Financial Distress conditions. The sample of population in this study are all conventional commercial banks in Indonesia registered in the Financial Services Authority of Indonesia. The number of samples in this study were included 37 commercial banks that their profitabilities were being declined, with a total number 146 observations. The method carried out in determining the sample is “Purposive” sampling. Based on the results of study and data analysis using the panel data method, it shows that capital, credit risk, profitability and liquidity have a positive effect on Financial Distress. The implication of the above conclusion is that it required further research to perform preventive actions to anticipate the measures of financial performance of the Bank, and it is expected to select a larger population of samples and variables that might have not been included in research on banking Financial Distress in Indonesia.

How to cite this paper
Haris, A., Ghozali, I & Najmudin, N. (2022). Indicators of financial distress condition in Indonesian banking industry.Accounting, 8(1), 27-36.

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Journal: Accounting | Year: 2022 | Volume: 8 | Issue: 1 | Views: 2714 | Reviews: 0

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