Observational analysis reveals key relationships among corporate governance, capital structure, and financial stability in Indonesian banks, indicating risk management's importance.
Key Points
Non-performing loans and capital adequacy ratio negatively impact return on assets and return on equity.
Good corporate governance positively affects financial performance metrics such as return on assets.
High debt-to-assets ratio is associated with lower profitability in Indonesian banks.
Effective management of credit risk and capital adequacy is crucial for sustaining bank profitability.