Journal of Management Information and Decision Sciences (Print ISSN: 1524-7252; Online ISSN: 1532-5806)


Financial ratio model and application of good corporate governance to NPL with inflation as a moderate variable

Author(s): Yusuf, M., Fathihani, Sari, L., Septiano, R., Nuryati, S., Lestari, I. D., Arief, Z., Hernawan, M. A., Nurhayati, S., & Azizah, K.

The Non-Performance Financing Ratio (NPF) is a ratio that is a very serious concern for banks because if this ratio is allowed to continue to increase, it will have an impact on decreasing profits, which, in turn, will reduce the Bank's financial performance. This study uses the ratio of Financing To Deposit Ratio, BOPO, and Quality of Implementation of GCG (Good Coverage Governance) to see its effect on NPF (Non-Performing Financing) with inflation as a Moderating variable in Islamic Commercial Banks Registered with the Financial Services Authority for the period 2014 – 2019. The analytical method used is multiple linear regression, which is processed using Eviews 9. The results show that: The implementation of GCG is carried out to comply with the applicable rules regarding sharia bank governance and serves as a reference for shareholders in determining investment decisions. Good GCG implementation has not been able to suppress the non-performing financing that occurs because the increase in NPF is caused by other factors that influence it. The higher the liquidity of third-party funds for financing, moderated by inflation, the higher the funding non-performing that occurs in Islamic commercial banks. Any increase in the BOPO, moderated by inflation, does not affect the condition of Non-Performing Financing. The higher the GCG self-assessment results, moderated by inflation, will lead to higher non-performing financing in Islamic commercial banks.

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