CAPITAL ADEQUACY RATIO TESTING IN THE PERFORMANCE OF REGIONAL DEVELOPMENT BANKS (BPD) IN EASTERN INDONESIA
Keywords:9 BPD (Indonesian Regional Development Banks), BOPO (Operational Efficiency Ratio) NPL, LDR, ROE,And CAR.
This study aims to examine the empirical models of BOPO, NPL, LDR and ROE mediated by CAR, using PLS linear regression with the inner model of the warp3 algorithm, which tries to identify the relationship between latent variables that follow the S curve. The results show the path coefficients and p-values for each direct effect between variables that influence positive. The relationship the BOPO and ROE shows a significant at 0.002, the relationship the NPL and ROE shows a coefficient value, 0.182 which is significant at 0.046*, the LDR relationship to ROE shows a coefficient value, 0.048 which is not significant at 0.276. The relationship BOPO and CAR shows a coefficient, 0.277 which is significant at 0.001***, the relationship between NPL and CAR shows a coefficient, 0.289 which is significant at 0.009***, the relationship between LDR and CAR variables shows a coefficient, 0.135 which is not significant at 0.232. Meanwhile, the relationship between the CAR and ROE shows a coefficient of 0.237, which is significant at 0.015**.The results of the mediating effect of the indirect effect coefficient BOPO→CAR→ROE is 0.066 with a p-value of 0.038 (p<5%)*. explained that CAR is able to mediate the effect of BOPO on ROE.
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