• Pariang Siagian School of Accounting, Bina Nusantara University, Jakarta



size, shares, capital, deposit, performing, interest, inflation, currency


Banks play an essential role in the economy, therefore, their performance must be maintained. Compared to other business sectors, the banking sector has continually achieved the greatest market shares over several periods. When a bank becomes more efficient, it can raise its income and market prices as well as investor confidence. This study examines various factors that influence operational efficiency and the implication for market prices. In 2016 – 2021 years, 28 banking companies were sampled from all banking companies listed on the Indonesia Stock Exchange. Purposive sampling was used for data collection, and linear multiple regression was used for data processing by running tests such as descriptive statistics, determination, regression equations, hypotheses, and implications. The findings reveal a statistically significant relationship between a firm’s size, capital adequacy, loan-to-deposit ratio, net interest, and inflation with operational efficiency, while non-performing loans and exchange rates have no a substantial impact. Additionally, capital adequacy, loan-to-deposit ratio, inflation, and exchange rates had statistically significant effects on market prices, although operational efficiency, non-performing loans, and net interest did not. The mediating analysis reveals that there is no interaction between non-performing loans and net interest with market prices, but it is a mediator for other variables. The research is important for a variety of stakeholders, including managers, investors, and policymakers, who are interested in resolving banking business operations, increasing financial performance, and preserving market prices by establishing mitigation strategies related to specific-internal and external factors.


Zogning, F. (2021). Agency Theory : A Critical Review. European Journal of Business and Management, 9 (2).

Alsharif, M. (2021). The Efficiency of Banks and Stock Performance: Evidence from Saudi Arabia. Cogent Economics and Finance ,9(1).

Altinay, T. A., Dogan, M., & Kevser, M. (2022). Comparing the Financial Performance of Islamic Banks in 10 Countries: New Evidence Using Entropy and WASPAS Methods. The Economics and Finance Letters, 9(2),197–210.

Anindhita, A. Y. (2017). Exchange Rate and International Trade: Case From Indonesian Manufacturing Sector. Signifikan: Jurnal Ilmu Ekonomi, 6(2), 247–266.

Arseto, D. D. (2022). The Effect of Capital Adequacy Ratio (CAR) and Liquidity on Profitability of Islamic Commercial Banks in Indonesia for the 2016-2020 Period.Jurnal Ilmiah Ekonomi Islam, 8(1).

Bhati, Shyam, De Zoysa, A., & Jitaree, W. (2019). Factors Affecting the Liquidity of Commercial Banks in India: A Longitudinal Analysis. Banks and Bank Systems, 14(4), 78–88.

Bošnjak, Hasan, A., & James, K. (2017). Analysis of the Banking Sector Performance in Bosnia and Herzegovina, Montenegro and Serbia before and after the Global Financial Crisis. ECONOMICS-Innovative and Economics Research Journal, 5(2), 83–101.

Boyd, J. H., Levine, R., & Smith, B. D. (2001). The Impact of In#ation on "Nancial Sector Performance. Journal of Monetary Economics, 47, 221–248.

Ramona, B. & Memmel, C.(2017). Banks’ Net Interest Margin and the Level of Interest Rates. Credit and Capital Markets, 50(3), 363–392.

Cili, M. R., & Alkhaliq, B. (2022). Economic Growth and Inflation: Evidence from Indonesia. Signifikan: Jurnal Ilmu Ekonomi, 11(1), 145–160.

Enkhtaivan Bolortuya. (2019). Do Past Relationship and Experience Help a Bank in Winning a Lead Mandate in the Syndicated Loan Bid?. Banking and Finance Review, 11(1), 59–78.

Gabriel, O, Victor, I.E., & Innocent, I. O. (2019). Effect of Non-Performing Loans on the Financial Performance of Commercial Banks in Nigeria. American International Journal of Business and Management Studies, 1(2), 1–9.

Green, J., & Zhao, W. (2022). Forecasting Earnings and Returns: A Review of Recent Advancements. Journal of Finance and Data Science 8, 120–137.

Hamadi, H. & Awdeh, A. (2012). The Determinants of Bank Net Interest Margin : Evidence from the Lebanese Banking Sector. Journal of Money, Investment and Banking, 23(23), 85–98.

Hamilton, A., (2018). Understanding Exchange Rates and Why They Are Important. Reserve Bank of Australia Bulletin, 1–18.

Hughes, J. P., & Mester, L. J. (2012). The Oxford Handbook of Banking Efficiency in Banking: Theory, Practice, and Evidence.

Hussein, Z. Q, Al-Marzouk, K. H., & Mahmood, E. H., (2022). The Impact of Bank Credit on Investment and Public Spending in Iraq for the Period (2005-2021). International Journal of Professional Business Review, 7(6), 1–16.

Islam, R., Ghani, A. B. A., Mahyudin, E., & Manickam, N. (2017). Determinants of Factors That Affecting Inflation in Malaysia. International Journal of Economics and Financial Issues, 7(2), 355–364.

Dadang, L. (2021). Determinants of Net Interest Margins of Indonesian. International Journal of Economics, Business and Accounting Research (IJEBAR),5(3), 893–901.

Murshed, M., & Rashid, S. (2020). An Empirical Investigation of Real Exchange Rate Responses to Foreign Currency Inflows: Revisiting the Dutch Disease Phenomenon in South Asia. The Economics and Finance Letters, 7(1), 23–46.

Naoaj, M. S. (2023). Exploring the Determinants of Capital Adequacy in Commercial Banks: A Study of Bangladesh’s Banking Sector European Journal of Business and Management Research, 8(2), 108–112.

Nazir, M. S., Nawaz, M. M., Anwar, M., & Ahmed, F. (2010). Determinants of Stock Price Volatility in Karachi Stock Exchange: The Mediating Role of Corporate Dividend Policy. International Research Journal of Finance and Economics 55, 100–107.

Northcott, C. N.,. (2004). Competition in Banking: A Review of the Literature. Bank of Canada: 24.

Obeid, R., & Adeinat, M. (2017). International Journal of Economics and Financial Issues Determinants of Net Interest Margin: An Analytical Study on the Commercial Banks Operating in Jordan (2005-2015). International Journal of Economics and Financial Issues, 7(4), 515–525.

Pervan, M., & Višić, J. (2012). Influence of Firm Size on Its Business Success.” Croatian Operational Research Review (CRORR), 3, 213–223.

Rafaqat, S., Rafaqat, S., Rafaqat, S., Rafaqat, D. (2021). The Impact of Fundamental Factors on the Share Price of Micro-Sized Nasdaq Listed Technology Companies. The Economics and Finance Letters, 8(2), 142–153.

Saksonova, S. (2014). The Role of Net Interest Margin in Improving Banks’ Asset Structure and Assessing the Stability and Efficiency of Their Operations. Procedia - Social and Behavioral Sciences, 150, 132–141.

Tjandrasa, B. B., Siagian, H., & Jie, F (2020). The Macroeconomic Factors Affecting Government Bond Yield in Indonesia, Malaysia, Thailand, and the Philippines. Investment Management and Financial Innovations, 17(3), 111–121.

Topić-Pavković, B., Kovačević, S., & Kurušić, D. (2023). The Impact of Innovative Financial and Banking Development on the Economic Growth of Bosnia and Herzegovina. ECONOMICS-Innovative and Economics Research,11(1), 251–267.

Ulansari, Rekno, D., & Septiarini, D. F. (2020). A Comparative Study of the Efficiency of Conventional and Sharia Insurance in Indonesia. Jurnal Keuangan dan Perbankan, 24(2), 202–213.

Ullah, S., Majeed, A., & Popp, J. (2023). Determinants of Bank’s Efficiency in an Emerging Economy: A Data Envelopment Analysis Approach. PLoS ONE 18, 1–17.

Vunjak, N., Dragosavac, M., Vitomir, J., & Stojanović, P. (2020). Central and South – Eastern Europe Banking Sectors in the Sustainable Development Function. ECONOMICS-Innovative and Economics Research,11(1),51–60.

Walker, J. S., Geyfman, V., & Tekatli, N. (2021). An Examination of The Stability of Bank Betas During Extreme Market Volatility: The Case of The Financial Crisis and The Pandemic. Banking and Finance Review, 12, 15–32.

Zeng, S. (2012). Bank Non-Performing Loans (NPLS): A Dynamic Model and Analysis in China. Modern Economy, 03(01), 100–110.




How to Cite