THE ANALYZE OF RISK-BASED BANK RATING METHOD ON BANK’S PROFITABILITY IN STATE-OWNED BANKS

Abstract

The rising level of a development implementation results, the productivity in the entire national economic power needs to be more enhanced. Theses development can give an optimal results to increase the prosperity, includes banking services. A bank health shows the bank’s ability to maintain its public trust, intermediary functions, and financial traffic. It used by the government to implement the economy wholly to compete in the world free trade liberalization era. The aims of these studies are to determine the influence of Risk-Based Bank Rating on Bank’s Profitability Level of State-Owned Banks Listed Indonesian Stocks Exchange in 2007-2013 Period. The research used secondary data in time-series. The samples are 4 banks from 38 banks populations. The data analyzed using a multiple regression model. The results of the research found (1) Risk-Based Bank Rating has significant influence on Bank’s Profitability simultaneously, (2) Credit Risk and (3) Liquidity Risk has negative significant influence on Bank Profitability, (4) Market Risk has positive significant influence on Bank Profitability, while (5) Capital has no significant influence on Bank Profitability of State-Owned Banks Listed Indonesian Stocks Exchange in 2007-2013 Period. For State-Owned Banks management parties, should always conducts restudying comprehensively and continuously to create a risk management effectively to avoid the unexpected scenario in the future.

Keywords: risk-based bank rating, profitability