THE ANALYSIS OF FINANCIAL PERFORMANCE BETWEEN THE MARKET DOMINATING STATE OWNED BANKS AND THE BIG PRIVATE BANKS
Abstract: There are 117
commercial banks in Indonesian market. According to InfoBankNews.com, the
state-owned banks dominated 41.10% of the market based on total assets. This
research aims to investigate the financial reasons behind the market domination
of the first 4 state-owned banks. This study also makes a comparison to the
financial indicators of 4 largest private banks. Panel data regression with
fixed effect model is used in this research. The result shows that NPL is one
of the underlying reasons behind the domination of the state-owned banks where
private banks’ NPL is 3.3 times higher than the state-owned banks’ NPL. Lower
NPL in state-owned banks may shed some light on the domination of market share.
So, the private banks should decrease the NPL ratio in order to increase their
market share.
Keywords: financial
Performance, non performing loans (NPL), market share, total assets
Penulis: Xenia I. S. Landjang,
Hizkia H. D. Tasik
Kode Jurnal: jpmanajemendd171102