Journal of Governance and Regulation - 2025 : Strengthening Bank Performance: The Nexus Between Corporate Governance, Capital Structure, and Financial Stability

Diansari, Rani Eka and Uyob, Suzilawati and Saputri, Lintang Dinda and Othman, Jaizah (2025) Journal of Governance and Regulation - 2025 : Strengthening Bank Performance: The Nexus Between Corporate Governance, Capital Structure, and Financial Stability. Journal of Governance and Regulation, 14 (3). pp. 105-116. ISSN 2220-9352

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Abstract

This study investigates how non-performing loans (NPLs), capital adequacy ratio (CAR), good corporate governance (GCG), and debt-to-assets ratio (DAR) influence the financial performance of Indonesian banks, measured using return on assets (ROA) and return on equity (ROE). Using multiple regression analysis on 40 banks listed on the Indonesia Stock Exchange from 2016 to 2022, the study finds that NPLs and CAR negatively affect ROA and ROE, while GCG has a positive effect on both performance measures. DAR negatively affects profitability, indicating that excessive debt may reduce financial returns. The study emphasizes the importance of credit-risk management, optimal capital adequacy, strong governance, and balanced capital structure in sustaining bank profitability and stability.

Item Type:	Article
Uncontrolled Keywords:	Bank Stability; Corporate Governance; Capital Structure; Financial Performance; Indonesia
Subjects:	H Social Sciences > HG Finance
Divisions:	Institute of Graduate Studies (IGS)
Depositing User:	LIBRARY2 UPTM
Date Deposited:	07 Aug 2026 08:33
Last Modified:	07 Aug 2026 08:33
URI:	http://eprints.uptm.edu.my/id/eprint/5956

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