Bank Risk Profile, Good Corporate Governance And Company Values in Banking Companies Go Public in Indonesia
Journal Title: Journal of Economics, Business, & Accountancy Ventura - Year 2017, Vol 20, Issue 1
Abstract
The latest Bank Indonesia Regulation No.14/18/PBI/2012 requires bank to have minimum capital of 8%-14% depends on the risk profile of each bank. Therefore, the main objective of this research is to assess whether the total of inherent risk profile of each bank meets the terms of this regulation. In addition, this study aims to examine the impact of inherent risk profile and GCG on the banking company value. The sample in this study is determined by purposive sampling method and resulted in 24 banks or 72 observations during 2011-2013. The results showed that 23 banks had low risk and low to moderate risk, and only one bank had moderate risk. The results also showed that inherent risk profile rating is equivalent to capital adequacy. In other words, inherent risk profile of these banks have complied with Bank Indonesia Regulation No.14/18/PBI/2012. Furthermore, this study indicated that GCG has significant and positive influence on the company value, while the inherent risk has no influence on the company value. Overall, this study suggest that go public banks in Indonesia are one of good alternative means of investment for its soundness as reflected by the fulfillment of minimum capital ratio required by the regulator.
Authors and Affiliations
Susi Retna Cahyaningtyas, Elin Erlina Sasanti, Wahidatul Husnaini
Keywords
Related Articles
- EP ID EP469125
- DOI 10.14414/jebav.v20i1.759
- Views 37
- Downloads 0
Impacts of in-kind transfer to household‟s budget proportion: Evidence from early reformation in Indonesia
The program distributing rice for reducing poverty for poor household (also known as Raskin) is one of social safety net programs in Indonesian’s government with its subsidized rice to the poor. The purpose of this progr...
The role of board of commissioners and transparency in improving bank operational efficiency and profitability
Good corporate governance is a critical aspect in banking industries because the largest part of the source of funds is from public. Two of the important aspects of good corporate governance are the role of the board of...
An Empirical Study on the Theory of Planned Behavior: the Effect of Gender on Entrepreneurship Intention
This study aimed to examine the effect of gender on entrepreneurship intention through attitude as a mediating variable of entrepreneurship, subjective norms, and perceived behavior controls, and their implications. The...
Snowball Effect of Interest Rate as a Control Instrument On Inflation Framework Targetingin Indonesia
Afterthe monetary crisisthe government changes its monetary policy strategyby using a new paradigm that Inflation Targeting framework. This new paradigm has been confirmed in Law No.23 of 1999and UUNo3 of 2004as the basi...
Big-five personality as a moderating variable in the relationship of CEO's perception and the compensation received toward CEO's desire to leave the company voluntarily
The study aims to obtain empirical evidence for the effect of personality on the impact of compensation received by CEO in Indonesia toward CEO voluntary turnover. This study uses two sources of data, primary and seconda...