The Effect of Third-Party Funds, Credit Risk, Market Risk, and Operational Risk on Profitability in Banking for Period 2014-2017

The study aimed to investigate the effect of third-party funds, credit risk, market risk, and operational risk on profitability in banking, especially on the banks included in BUKU 2 category simultaneously or partially. The sampling technique used in the study was saturated sampling. Therefore, a number of 54 banks were obtained as samples. The data in the study were quantitative data, namely in form of financial statements of banking companies included in BUKU 2 category for period 2014-2017. The data were obtained from websites of the concerned banks. The research method used was multiple linear regression analysis. In the study, to measure the Third-Party Funds variable used DPK ratio, to measure the Credit Risk variable used NPL and NPF ratio, to measure the Market Risk variable used NIM ratio, to measure the Operational Risk variable used BOPO ratio, and to measure the Profitability variable used ROA ratio. The result of the study showed that partially third-party funds and credit risk had no significant effect on profitability, partially market risk had significant positive effect on profitability, and partially credit risk had significant negative effect on profitability. While simultaneously, third-party funds, credit risk, market risk, and operational risk had significant effect on profitability.