THE BRANCH EXPANSION AND THE PERFORMANCE OF THE BANKS: THE CASE OF INDONESIA

Hery Prasetyo () and Sony Sunaryo ()
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Hery Prasetyo: Institut Teknologi Sepuluh Nopember
Sony Sunaryo: Institut Teknologi Sepuluh Nopember

Bulletin of Monetary Economics and Banking, 2015, vol. 18, issue 1, 85-106

Abstract: Opening new branches may help the banks to expand and is a priority for the banks to enlarge the public inclusion. Indonesian banking industry is currently not efficient and still focus more on networking the branches than improving the banking access to the public. This paper utilize the path analysis to see the link betweeen the branch expansion and the performance of the banks. The analysis shows that the increase of the number of branches and employees does not significantly influence the financial performance of the banking industry from the period of 2011-2012. This prove that the inefficiency of banking industry as one of the performance indicators of banking is not the main factor that be caused by increasing the number of branches and employees.

Keywords: Number of branches and employees; Financial performance of industrial banking; Path Analysis (search for similar items in EconPapers)
JEL-codes: G21 L11 (search for similar items in EconPapers)
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:idn:journl:v:18:y:2015:i:1d:p:85-106

DOI: 10.21098/bemp.v18i1.518

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