Effect of Loan Interest Rate and Inflation Rate on Net Profit Growth in the Financial Sector Listed on the Indonesia Stock Exchange

Abstract

This study was conducted to find out how the effect of interest rates and inflation on net profit growth in Conventional Bank Sub-Sector Companies listed on the Indonesia Stock Exchange. The data is taken from the www.idx.co.id. The data used from 2017 to 2021. The population in this study was 43 companies with a sample of 20 companies used. This study used quantitative data processed with the Eviews version 9 application using the panel data regression method. The test results concluded that the variable interest rate partially did not have a significant effect on net profit growth, but inflation partially had a significant effect on the growth of net profit of Conventional Bank Sub-Sector Companies for the 2017-2021 period. Simultaneously, interest rates and inflation did not have a significant effect on the growth of net profit of commercial bank companies. The contribution made by variable interest rates and inflation to profit growth was only 5.66%. Keywords: Profit Growth, Interest, Inflation, Conventional Banks