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Growing Science » Accounting » Determinant of net interest income of commercial banks in Indonesia

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Accounting

ISSN 2369-7407 (Online) - ISSN 2369-7393 (Print)
Quarterly Publication
Volume 8 Issue 3 pp. 259-268 , 2022

Determinant of net interest income of commercial banks in Indonesia Pages 259-268 Right click to download the paper Download PDF

Authors: R. Mahelan Prabantarikso, Zaenal Abidin, Edian Fahmy, Mayda Tyastika, Amabel Nabila

DOI: 10.5267/j.ac.2022.1.002

Keywords: Net interest income (NII), Commercial Banks, Credit, NPL, Vector Error Correction Model (VECM)

Abstract: This study aims to identify the factors that contribute to the formation of Net interest income (NII) for commercial banks in Indonesia in the short and long-term using the Vector Error Correction Model (VECM). The results showed that in the short term all variables in each period tend to adjust to achieve long-term balance. In the short term, the variables that affect NII are credit and NPL of large and retail trade, construction credit, transportation credit and NPL warehousing and communication, as well as lending rate facility. While in the variable length figures that affect NII are credit variables and NPL large and retail trade, Credit and NPL Transportation, warehousing and communication, other credit and Third-Party Funds (Deposit) collected. The analysis of Impulse Response Function can be proven that NII most quickly achieves stability when dealing with the shocks of large trade and retail NPL. Meanwhile, in the Forecasting Variance Decomposition analysis, it can be concluded that the variable that gives the greatest contribution to NII is the amount of construction credit.


How to cite this paper
Prabantarikso, R., Abidin, Z., Fahmy, E., Tyastika, M & Nabila, A. (2022). Determinant of net interest income of commercial banks in Indonesia.Accounting, 8(3), 259-268.

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Journal: Accounting | Year: 2022 | Volume: 8 | Issue: 3 | Views: 1736 | Reviews: 0

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