The Effects of Capital and Liquidity on Profitability with Credit Problem as a Moderating Variable Among Conventional Commercial Banks

Abstract

This study aimed to obtain empirical evidence about the effects of capital and liquidity on profitability with credit problem as a moderating variable among conventional commercial banks listed in IDX during 2014-2018. In this study, the data was obtained from the annual financial reports of conventional commercial banks. The banking companies in this study consisted of 40 companies for each period during 2014-2018. The statistical method used to test the research hypothesis was a moderated regression model with EViews version 9 for Windows program. The results show that capital and liquidity partially have a significant effect on profitability, while credit problem does not. In addition, credit problem can moderate the effect of capital on profitability, but on the other hand, it cannot moderate the effect of liquidity on profitability.