The Effect of Efficiency, Capital Adequacy and Liquidity on the Financial Performance of Commercial Banks in Indonesia with Foreign Share Ownership as Moderator

Abstract

This study aims to determine the effect of efficiency (BOPO), capital adequacy (CAR), and liquidity (LDR) on the financial performance of commercial banks with foreign share ownership as a moderator variable. This research was conducted on commercial banks included in the KBMI 3 and KBMI 4 categories with the research period 2017 - 2022. The sampling technique used in this research is saturated sample with a total sample of 13 commercial banks. The results of this study indicate that efficiency (BOPO) has a significant negative effect on financial performance while capital adequacy, liquidity has no effect on financial performance. Furthermore, foreign share ownership is able to moderate the effect of capital adequacy on financial performance but has not been able to moderate the effect of independent variables efficiency and liquidity on the financial performance of KBMI 3 and KBMI 4 category banks.