Jurnal Keuangan dan Perbankan Universitas Merdeka Malang
Factors Affecting Commercial Bank’s Net Interest Margin : Study Case in Indonesia, Thailand and Philippines.
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Title
Jurnal Keuangan dan Perbankan Universitas Merdeka Malang
Factors Affecting Commercial Bank’s Net Interest Margin : Study Case in Indonesia, Thailand and Philippines.
Factors Affecting Commercial Bank’s Net Interest Margin : Study Case in Indonesia, Thailand and Philippines.
Subject
Commercial Banks; Financial Institutions and Services
Description
The aim of this research is to investigate determinants factors of Commercial Banks’s net
interest margin in Indonesia, Thailand and Philippines. This study uses quarterly panel data from 2010 until 2020. The OLS Equation Model was used to analyze the macroeconomic factors and banks' specific factors towards Net Interest Margin (NIM). The result showed that inflation rate as the only one factor from Macroeconomic factors and Overheard cost is one from Bank Specific factors which significantly affect Net Interest
Margin in all of these countries. Other than that, valuable findings from this research shows that determinants factors which have significant impact from bank specific characteristics in each country are different. In Indonesia, Higher Size of operations, Risk Aversion and Income Diversification are determinants factor that can lower net interest margin. Bank in Indonesia have to manage their credit risk well, because this factor can potentially lead to higher NIM. Commercial Banks in Thailand and Philippines show opposite result. Larger size of operations and higher risk aversion, will lead to higher NIM. Market concentration plays a critical role to minimize NIM in Phillippines. So, regulator should maintain this
condition. Because higher competition potentially lead to higher NIM in Philippines’s bank.
interest margin in Indonesia, Thailand and Philippines. This study uses quarterly panel data from 2010 until 2020. The OLS Equation Model was used to analyze the macroeconomic factors and banks' specific factors towards Net Interest Margin (NIM). The result showed that inflation rate as the only one factor from Macroeconomic factors and Overheard cost is one from Bank Specific factors which significantly affect Net Interest
Margin in all of these countries. Other than that, valuable findings from this research shows that determinants factors which have significant impact from bank specific characteristics in each country are different. In Indonesia, Higher Size of operations, Risk Aversion and Income Diversification are determinants factor that can lower net interest margin. Bank in Indonesia have to manage their credit risk well, because this factor can potentially lead to higher NIM. Commercial Banks in Thailand and Philippines show opposite result. Larger size of operations and higher risk aversion, will lead to higher NIM. Market concentration plays a critical role to minimize NIM in Phillippines. So, regulator should maintain this
condition. Because higher competition potentially lead to higher NIM in Philippines’s bank.
Creator
Vina Nugroho, Kim Sung Suk
Source
DOI: 10.26905/jkdpv27i2.9598
Publisher
Universitas Merdeka Malang
Date
April 2023
Contributor
Sri Wahyuni
Rights
ISSN: 2443-2687 (Online) ISSN: 1410-8089 (Print)
Format
PDF
Language
English
Type
Text
Files
Collection
Citation
Vina Nugroho, Kim Sung Suk, “Jurnal Keuangan dan Perbankan Universitas Merdeka Malang
Factors Affecting Commercial Bank’s Net Interest Margin : Study Case in Indonesia, Thailand and Philippines.,” Repository Horizon University Indonesia, accessed March 14, 2025, https://repository.horizon.ac.id/items/show/4896.
Factors Affecting Commercial Bank’s Net Interest Margin : Study Case in Indonesia, Thailand and Philippines.,” Repository Horizon University Indonesia, accessed March 14, 2025, https://repository.horizon.ac.id/items/show/4896.