Proceedings of the 5th International Conference on Global Innovation and Trends in Economy 2024 (INCOGITE 2024)

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Analysis of The Basel Iii Liquidity and Minimum Capital Requirements Towards Bank Performance: Evidence From Commercial Banks In Indonesia

Authors
Rhenaldi Johanes Rokiyanto1, Antonius Siahaan1, *
1Swiss German University, Tangerang Selatan, Indonesia
*Corresponding author. Email: antonius.siahaan@sgu.ac.id
Corresponding Author
Antonius Siahaan
Available Online 11 December 2024.
DOI
10.2991/978-94-6463-585-0_19How to use a DOI?
Keywords
Basel III Framework; Net Stable Funding Ratio; Tier 1 Capital Ratio; Return on Asset
Abstract

This study identifies the impact of the Basel III Net Stable Funding Ratio (NSFR) and Tier 1 Capital Ratio on the performance of KBMI 3 and KBMI 4 commercial banks in Indonesia from 2018 to 2023. Using Return on Assets (ROA) as the performance metric, panel data regression analysis is conducted with additional control variables including Non-Performing Loan (NPL), Inflation, and Gross Domestic Product (GDP). The findings reveal a significant negative impact of NSFR on bank profitability, indicating that an increase in NSFR leads to a decrease in bank performance. Conversely, the Tier 1 Capital Ratio shows a positive association with ROA, suggesting that higher capital buffers improve bank profitability. These results emphasize the importance of equity capital and lower leverage in reducing the cost of funds for banks. A balanced approach is recommended for banks to comply with the NSFR requirement while maintaining profitability.

Copyright
© 2024 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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Volume Title
Proceedings of the 5th International Conference on Global Innovation and Trends in Economy 2024 (INCOGITE 2024)
Series
Advances in Economics, Business and Management Research
Publication Date
11 December 2024
ISBN
978-94-6463-585-0
ISSN
2352-5428
DOI
10.2991/978-94-6463-585-0_19How to use a DOI?
Copyright
© 2024 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

Cite this article

risenwbib
TY  - CONF
AU  - Rhenaldi Johanes Rokiyanto
AU  - Antonius Siahaan
PY  - 2024
DA  - 2024/12/11
TI  - Analysis of The Basel Iii Liquidity and Minimum Capital Requirements Towards Bank Performance: Evidence From Commercial Banks In Indonesia
BT  - Proceedings of the 5th International Conference on Global Innovation and Trends in Economy 2024 (INCOGITE 2024)
PB  - Atlantis Press
SP  - 264
EP  - 275
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6463-585-0_19
DO  - 10.2991/978-94-6463-585-0_19
ID  - Rokiyanto2024
ER  -