Impact of the COVID-19 pandemic and New Normal implementation on credit risk and profitability of Indonesian banking institutions
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DOIhttp://dx.doi.org/10.21511/bbs.16(3).2021.10
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Article InfoVolume 16 2021 , Issue #3, pp. 104-112
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This study aims to compare the credit risk and profitability of banks in Indonesia. For this, the descriptive-quantitative method is used. The sample collection is based on the purposive sampling method. The study involved 71 Indonesian banks listed on the Indonesian Stock Exchange and Financial Services Authority, both conventional and Sharia. The research data are secondary data that include published results of quarterly financial reports of both conventional and sharia banks obtained from the website of the Financial Services Authority or the official websites of banks. The profitability of banks in making profit is measured by the Return on Assets ratio. The method of analysis used is the paired sample t-test. The results show significant differences in nonperforming loans (NPL) before and after the COVID-19 pandemic in conventional banking. However, there is no significant difference in Sharia banking. Moreover, there is no significant difference in profitability before and after the new normal implementation. This study provides empirical evidence that Indonesia’s banking restructuring policies to anticipate the impact of COVID-19 did not work optimally. The study is expected to help bank managers and the Financial Services Authority as a basis for evaluating the implementation of government policies to restructure the banking system.
- Keywords
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JEL Classification (Paper profile tab)G18, G21, G32
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References30
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Tables17
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Figures1
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- Figure 1. Research timeline
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- Table 1. Hypothesis testing results
- Table A1. Paired samples correlations (the result of H1a)
- Table A2. Paired samples test (the result of H1a)
- Table A3. Paired samples correlations (the result of H1b)
- Table A4. Paired samples test (the result of H1b)
- Table A5. Paired samples correlations (the result of H2a)
- Table A6. Paired samples test (the result of H2a)
- Table A7. Paired samples correlations (the result of H2b)
- Table A8. Paired samples test (the result of H2b)
- Table A9. Paired samples correlations (the result of H3a)
- Table A10. Paired samples test (the result of H3a)
- Table A11. Paired samples correlations (the result of H3b)
- Table A12. Paired samples test (the result of H3b)
- Table A13. Paired samples correlations (the result of H4a)
- Table A14. Paired samples test (the result of H4a)
- Table A15. Paired samples correlations (the result of H4b)
- Table A16. Paired samples test (the result of H4b)
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