Banks' Core Deposits and Net Interest Margin: Do Size and
Ownership Structure Matter?

Banks' Core Deposits and Net Interest Margin: Do Size and
Ownership Structure Matter?

: Bank size, Core deposits, Mediation, Net interest margin, Ownership structure

Banks’ core deposits and net interest margins play important roles in the banks’ value creation
process. This study examines the effects of bank size and ownership structure on banks’ core deposits
and net interest margins. The mediating role of core deposits funding on the relationship among
variables being studied is also explored. Applying a structural equation modeling approach on panel
data consisting of 39 conventional banks listed on the Indonesian Stock Exchange during 2016-2020,
this study documents several important findings. Firstly, core deposits fundings positively affect
banks’ net interest margins. Secondly, bank size has a positive effect on banks’ core deposits fundings,
and has a positive indirect as well as total effect on net interest margin. Thirdly, managerial and
institutional ownerships have negative effects on core deposits, positive direct effects on bank net
interest margin, but negative indirect effects on bank net interest margin. Lastly, the positive direct
effects of managerial and institutional ownership on bank net interest margin are totally offset by the
negative indirect effects brought on net interest margin (NIM) through core deposits.

Iman Sofian Suriawinata, Doddi Prastuti, Pristina Hermastuti

https://jurnal.unmer.ac.id/index.php/jkdp/

STIE Indonesia Jakarta

2023-06-17

Fajar Bagus W

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