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THE IMPACT OF BANK-SPECIFIC FACTORS ON NON-PERFORMING LOAN IN INDONESIA: EVIDENCE FROM ARDL MODEL APPROACH

BAREKENG: Jurnal Ilmu Matematika dan Terapan · Vol. 16 No. 2 (2022) · pp. 675–686

DOI
10.30598/barekengvol16iss2pp675-686
ISSN
2615-3017, 1978-7227
Published
2022-06-01
Publisher
PATTIMURA UNIVERSITY
Language
eng

Abstract

Non-performing Loan (NPL) is an indicator that is generally used to determine the ability of bank management to manage non-performing loans. This study aims to analyze the impact of bank-specific factors on NPL. The bank-specific factors are Capital Adequacy Ratio (CAR), Return on Assets (ROA), Operating Expenses on Operating Income (BOPO), and Loan to Deposit Ratio (LDR). The data used is monthly time series data, a case study on Commercial Banks in Indonesia from January 2015 to August 2020. The model used to analyze these problems is Autoregressive Distributed Lag (ARDL). The results obtained are ARDL(1,6,0,1,1) model is the best model. The model shows that bank-specific factors have a direct impact on NPL. Specifically, the ARDL bounds test offers the analysis results, which show that the ability of bank-specific factors to explain the NPL of commercial banks in Indonesia is 84%. At the same time, 16% are other factors outside the model. The analysis results show a long-run cointegration relationship between NPL and specific characteristics, CAR, ROA, and BOPO. Then, only CAR, BOPO, and LDR impact NPL in the short-run relationship. The equilibrium correction obtained is significant and confirms a long-run relationship. The equilibrium correction indicates a high velocity towards stability after a shock. It means that the performance of Commercial Banks in Indonesia is outstanding during the COVID-19 Pandemic because the ability to recover from shock is relatively faster

Collaboration network of the authors

14 authors · 26 co-authorship links

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Co-authorOrganisationJoint articles
Venn Y. I. IlwaruAffiliation unknown1
Francis Y. RumlawangAffiliation unknown1
HARMANUS BATKUNDEAffiliation unknown1
Norisca LewaherillaAffiliation unknown1
Ferina Lestari DamamainAffiliation unknown1
Marsa SopaheluwakanAffiliation unknown1
Salma DamayantiAffiliation unknown1
Gilbert Alvaro SouisaAffiliation unknown1
Reyner M. LeiwakabessyAffiliation unknown1
Mohammad Zanuar F TerimAffiliation unknown1

Affiliations come from OpenAlex; journal OAI-PMH metadata carries none. Authors without an OpenAlex ID are matched by name, which can merge or split people.

Metadata source: OAI-PMH (metadata jurnal) https://ojs3.unpatti.ac.id/index.php/barekeng/oai, first harvested 5 Nov 2026, last seen 5 Nov 2026.
Original metadata (oai_dc) 
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	<dc:title xml:lang="en-US">THE IMPACT OF BANK-SPECIFIC FACTORS ON NON-PERFORMING LOAN IN INDONESIA: EVIDENCE FROM ARDL MODEL APPROACH</dc:title>
	<dc:creator>Sinay, Lexy Janzen</dc:creator>
	<dc:creator>Latupeirissa, Sanlly J</dc:creator>
	<dc:creator>Pelu, Shelma M</dc:creator>
	<dc:creator>Tilukay, Meilin I</dc:creator>
	<dc:description xml:lang="en-US">Non-performing Loan (NPL) is an indicator that is generally used to determine the ability of bank management to manage non-performing loans. This study aims to analyze the impact of bank-specific factors on NPL. The bank-specific factors are Capital Adequacy Ratio (CAR), Return on Assets (ROA), Operating Expenses on Operating Income (BOPO), and Loan to Deposit Ratio (LDR). The data used is monthly time series data, a case study on Commercial Banks in Indonesia from January 2015 to August 2020. The model used to analyze these problems is Autoregressive Distributed Lag (ARDL). The results obtained are ARDL(1,6,0,1,1) model is the best model. The model shows that bank-specific factors have a direct impact on NPL. Specifically, the ARDL bounds test offers the analysis results, which show that the ability of bank-specific factors to explain the NPL of commercial banks in Indonesia is 84%. At the same time, 16% are other factors outside the model. The analysis results show a long-run cointegration relationship between NPL and specific characteristics, CAR, ROA, and BOPO. Then, only CAR, BOPO, and LDR impact NPL in the short-run relationship. The equilibrium correction obtained is significant and confirms a long-run relationship. The equilibrium correction indicates a high velocity towards stability after a shock. It means that the performance of Commercial Banks in Indonesia is outstanding during the COVID-19 Pandemic because the ability to recover from shock is relatively faster</dc:description>
	<dc:publisher xml:lang="en-US">PATTIMURA UNIVERSITY</dc:publisher>
	<dc:date>2022-06-01</dc:date>
	<dc:type>info:eu-repo/semantics/article</dc:type>
	<dc:type>info:eu-repo/semantics/publishedVersion</dc:type>
	<dc:format>application/pdf</dc:format>
	<dc:identifier>https://ojs3.unpatti.ac.id/index.php/barekeng/article/view/5366</dc:identifier>
	<dc:identifier>10.30598/barekengvol16iss2pp675-686</dc:identifier>
	<dc:source xml:lang="en-US">BAREKENG: Jurnal Ilmu Matematika dan Terapan; Vol 16 No 2 (2022): BAREKENG: Jurnal Ilmu Matematika dan Terapan; 675-686</dc:source>
	<dc:source>2615-3017</dc:source>
	<dc:source>1978-7227</dc:source>
	<dc:source>10.30598/barekengvol16iss2year2022</dc:source>
	<dc:language>eng</dc:language>
	<dc:relation>https://ojs3.unpatti.ac.id/index.php/barekeng/article/view/5366/4498</dc:relation>
</oai_dc:dc>