DOI: 10.36347/sjebm.2019.v06i08.006

Pages: 432-440

The purpose of the study was to analyze the influence of bank specific factors consisting of; ratio of non-performing loans (NPL), net interest margin (NIM), capital adequacy ratio (CAR), loans deposit ratio (LDR), operating expenses and operating income (BOPO), and capital structure (DER), while macroeconomic variables consist from; inflation and interest rates. The research sample is 30 national private commercial banks that have been listed on the Indonesia Stock Exchange during the period 2010-2016 which were analyzed using the panel data regression method. The results showed that the NPL and BOPO variables had a negative effect on bank profitability, while the NIM, LDR, and DER variables had a positive effect. For the CAR variable, inflation and interest rates have no effect on bank profitability. Empirical findings of the study have implications that bank specific factors are important to be considered by bank management in improving the performance of bank profitability.