FINANCIAL PERFORMANCE ANALYSIS IN THE BANKING SECTOR BEFORE AND AFTER FINANCIAL TECHNOLOGY REGULATION IN INDONESIA (CASE STUDY OF BUKU-IV IN INDONESIA FOR PERIOD 2013-2019)

Abstract

The banking sector is considered as an important sector for financial system stability with banks playing a major role such as investing in economic growth, business and household financing, and in the payment system. Banking stability itself is described by a healthy banking condition and as a picture of overall bank performance. The purpose of this study is to measuring and analyzing financial performance using Banks categorized in BUKU-IV such as Bank Rakyat Indonesia, Bank Mandiri, Bank Central Asia, Bank Negara Indonesia, Bank CIMB Niaga, and Bank Panin before (2013-2015) and after (2016-2019) the government issued the regulation about financial technology (Fintech). The challenges created against banks from new entrants to the financial industry through Fintech can affect bank performance because they compete with banks in their core business. This study analyzed banks level of financial health performance with RBBR approach to examines Current Account and Saving Account (CASA) Ratio, Loan to Deposit Ratio (LDR), Non-Performing Loan (NPL), Return on Asset (ROA), Net Interest Margin (NIM), and Capital Adequacy Ratio (CAR). It shown by almost all variables from that banks categorized as very healthy performance. Using Fixed Effect Model to see the effect of CASA, LDR, NPL, NIM, CAR, and dummy Fintech to ROA, the result are independent variables give a significant impact on ROA, but only only LDR does not have a significant impact on the profitability of the banks. There is indication that the fintech policy during the study period gave its effect on increasing bank profitability in BUKU-IV.