The Effect of Bank Health on Firm Value (Case Study in the Bank Subsector Companies Listed on the Indonesia Stock Exchange for the 2013-2018 Period)

Abstract

The Bank must maintain its health, as stated in the LAW No. 10 year 1998 on banking. Banks
with good conditions of management will increase the value of the company. But it does not align with the
company's empirical conditions. Therefore, based on The Bank Indonesia regulation No. 13/I/PBI/2011
Bank is obliged to conduct health level assessment of bank by RGEC method. Through this research will
be conducted assessment of the value of the company using RGEC ratio with the variables used by NPL
(Non-Performing Loan), LDR (Loan to Deposit Ratio), GCG (Good Corporate Governance), NIM (Net
Interest Margin) and CAR (Capital Adequacy Ratio). This research used secondary data to the banking
companies listed on the Indonesia Stock Exchange (IDX) 2013-2018 as the data collection methods.
Samples were used 25 banks from 33 banks, with purposive sampling methods with a 5-year observation
period. The data analysis method in this research is the regression of data panels with EViews 9 software.
Based on the results of data processing, simultaneously showed that the NPL, LDR, GCG, NIM and CAR
have an influence on the value of the company. Whereas based on the results of data processing in the
partial indicates that the NPL, LDR, GCG and NIM have an influence on the value of the company. But
only CAR that has no influence on the value of the company.