The Effect of Credit Risk, Liquidity Risk and Management Efficiency on Profitability Through Capital

Andini Ismail (), Abd Rakhman Laba and Andi Aswan
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Andini Ismail: Universitas Hasanuddin
Abd Rakhman Laba: Universitas Hasanuddin
Andi Aswan: Universitas Hasanuddin

A chapter in Proceedings of the 9th International Conference on Accounting, Management, and Economics 2024 (ICAME 2024), 2025, pp 1885-1899 from Springer

Abstract: Abstract The purpose of this study was to determine the effect of credit risk, liquidity risk and management efficiency on profitability in banking in Indonesia and to determine whether capital can mediate the effect of credit risk, liquidity risk and management efficiency on profitability. This study uses secondary data, using a purposive sampling approach, the research population consists of banks in Indonesia. Obtained a sample size of 10 banks. The data was processed using SPSS Statistic 23 and SmartPLS 4. With SEM-PLS. The results showed that credit risk and liquidity risk had a negative and significant effect on capital, while management efficiency had a positive and insignificant effect on capital. Liquidity risk, management efficiency and capital had a negative and significant effect on profitability. While credit risk has a negative and insignificant effect on profitability, the results of indirect influence research show that credit risk and management efficiency have no significant effect on profitability through capital while liquidity risk has a significant effect on profitability through capital.

Keywords: Credit Risk; Liquidity Risk; Management Efficiency; Capital; profitability (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:spr:advbcp:978-94-6463-758-8_150

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DOI: 10.2991/978-94-6463-758-8_150

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