Impact of Prime Lending Rate, Cer, and LDR on NPM of Kbmi 3 Banking Institutions in Indonesia During Covid-19.

This study investigates the impact of the Prime Lending Rate, Cost Efficiency Ratio (CER), and Loan to Deposit Ratio (LDR) on the Net Profit Margin (NPM) of Indonesian KBMI 3 banks during the 2020–2022 period, a time characterized by heightened financial volatility due to the COVID-19 pandemic. The research employs panel data regression to assess how these macro-financial indicators influence bank profitability amid disrupted economic conditions. The empirical findings reveal that among the three variables, only the Cost Efficiency Ratio has a statistically significant effect on Net Profit Margin. In contrast, the Prime Lending Rate and Loan to Deposit Ratio do not exhibit meaningful influence. These findings highlight the pivotal role of operational efficiency in maintaining profitability to safeguard financial performance amid economic volatility. As such, banks are advised to focus on optimizing their cost structures and enhancing resource allocation efficiency to remain resilient and competitive in an uncertain macroeconomic environment.