Determinants of RAROC of Bank using Internal and External Bank Factor and Size as Moderating Variable

Abstract

This paper aims to explore Effect of Internal and External Factor Company on bank profitability with size as moderating variable.  Financial ratio Company and macroeconomics variable are used to determine bank profitability which is Risk Adjusted Return on Capital (RAROC).  Model Panel Data is used to determine Risk Adjusted Return on Capital in Indonesia for period of 2007 to 2018.  This research found that Net Interest Margin, Non-Performing Loan, and Assets which is internal factor significantly affected bank performance of RAROC.  Fed Rate and government policy of period of 2009 to 2014 as external factor significant affected bank performance of RAROC.  Asset as moderating variable could significantly moderate Net Interest Margin, Non-Performing Loan, Consumption of cement and Oil Price Rate to affect bank performance of RAROC.