DETERMINANT MODEL OF CAPITAL ADEQUACY RATIO WITH INTERVENING VARIABLE NON PERFORMING LOAN
This research is intended to analyze and answer the inconsistencies in the results of previous research, as well as the phenomenon of Non-Performing Loans (NPL) which does not answer its effect on the Capital Adequacy Ratio (CAR). This is what prompted the researcher to conduct research again using a different time series and cross-sectional. This type of research is quantitative descriptive with a panel data multiple regression analysis method using a sample of 18 banking companies over five years. This research formula is to maximize the CAR value through NPL as an intervening variable using the research object of banking companies on the Indonesia Stock Exchange. Two research models are integrated into one and each goes through model selection test stages, Chow Test, Hausman Test, and Lagrange Multiplier Test. Results in the first research model; that LDR can explain its effect on NPL with a positive correlation as the applicable theory. Meanwhile, BOPO can explain its effect on NPL with a negative correlation, not as in theory. Results of the second research model; only IO can directly explain its effect on CAR, while other variables, either directly or indirectly, cannot explain its effect on CAR. The use of NPL as an intervening variable does not function to mediate CAR so that this variable cannot be used as a reference for predicting CAR. It is hoped that these results can provide maximum guidance for banking management.
Institutional Ownership, Loan to Deposit Ratio, BOPO, Non-Performing Loan, Capital Adequacy Ratio.