THE INFLUENCE OF CREDIT RISK AND PROFITABILITY ON THE FINANCIAL STABILITY OF BANKS IN INDONESIA FOR THE PERIOD 2019-2023

Abstract

This study aims to investigate the effect of credit risk and profitability on the financial stability of banks listed on ASBANDA and the Indonesia Stock Exchange in 2019 - 2023. The population used in this study consisted of 47 banks listed on ASBANDA and the Indonesia Stock Exchange. The method used in sampling is Purposive Sampling. The sample obtained based on the criteria was 47 companies with the observation period 2019 - 2023, so the total observation data was 235 data. The data analysis technique used in this study uses panel data. In this study credit risk is measured using Non Performing loans (NPL), Profitability using Return On Equity (ROA), and bank financial stability ZScore. The results showed that credit risk has no significant effect on bank financial stability. Profitability has a positive and significant effect on bank financial stability.