DETERMINANTS OF INTERNAL AND EXTERNAL FACTOR ON COMMERCIAL BANK IN INDONESIA

Abstract

This study aims to examine the influence of the internal and external factor (inflation, Product domestic bruto, the size, and the Non Performing Loan) on financial performance for 3 years during the period 2012-2014.This study uses secondary data which includes 24 companies listed in Indonesia Stock Exchange in 2012 to 2014 by using purposive sampling. Data were analyzed using multiple linear regressions to test the effect of independent variables on the dependent variable.The results showed that not all of the variables had significant effect. Inflation and PDB have a no significant effect. Sizes have a positive effect and significant on financial performance. NPL have a negative effect and significant on financial performance. Recomendation for bank should pay attention on their lending because NPL affects financial performance. For general society, the size and NPL should be paid attention for the funds kept safe. For further research, independent variables can be added and use different proxy.