Assessment of bank's health using analysis risk profile, good corporate governance, earnings, capital (RGEC)

Abstract

Bank Indonesia Regulation No.13/1/PBI/2011 requires banks to regularly conduct a self-assessment using the RBBR (Risk-based Bank Rating) risk approach at the individual and consolidated levels. This health assessment is called RGEC (Risk Profile, Good Corporate Governance, Earnings, and Capital).  This research aims to determine the effect of bank soundness with Risk Profile, Good Corporate Governance, Earning and Capital on Firm Value at Conventional Banks listed on the Indonesian Stock Exchange for the period 2019 to 2021. The sampling technique used in this study is purposive sampling. The sample criteria are conventional banking companies registered and publish complete annual financial statements that do not merge during 2019–2021. This study used 40 samples based on predetermined criteria. Analysis of the data in this study using Microsoft Excel 2019 and hypothesis testing using panel data regression analysis with the EViews version 12.0 program with a significance level of 5%. The results of this study are (1) Risk Profile using Non-Performing Loan does not affect firm value, (2) Good Corporate Governance has a positive effect on firm value, (3) Earning using Return on Assets has no effect on firm value, (4) Capital using Capital Adequacy Ratio has a positive effect on firm value. The implications of this research for banks are to increase company value; conventional banks can pay attention to the Risk Profile, Good Corporate Governance, Earnings, and Capital (RGEC) to improve their performance and for investors to be a reflection of good information to invest. The limitations of this study are that some banking companies do not publish complete financial statements, and research variables, namely profile risk and earning, do not support the theory, so they require further research.

Keywords: {'name': 'Risk profile, good corporate governance, earnings, capital, and firm value'}

Authors & affiliations

Penia Marsella
Affiliation not supplied

Dewi Cahyani Pangestuti
Affiliation not supplied

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