This study discusses the factors that influence profitability in the banking industry in Indonesia Stock Exchange. Samples used as many as 27 companies engaged in the banking industry listed in the Indonesia Stock Exchange (IDX) during the five years from 2009-2013. The study method used is linear regression analysis that supported by Eviews 8.0. The dependent variables is profitability, the independent variables is banks size, liquidity risk, operating cost ratio, capital adequacy ratio, and credit risk, and control variables is GDP growth rate and interest rate. The results showed that there is a negative effect between the operating cost ratio and credit risk on the profitability. This study implicate that to improve profitability, the companies must manage operating cost ratio efficient as possible.
Kata Kunci / Keywords:
bank size, capital adequacy ratio, credit risk, GDP growth rate, interest rate, liquidity risk, operating cost ratio, return on assets.