Mia Ayu Gusti, Alpon Satrianto, Candrianto, Egy Juniardi, Heppy Setya Prima
As financial intermediary institutions, banks operate in a dynamic and complex environment influenced by internal and external factors and various risks that impact their financial performance. This study aims to examine the influence of bank-specific and macroeconomic variables that affect credit risk and Indonesian conventional commercial banks’ financial performance. Structural equation modeling is used to analyze time series data from quarter 1993 to quarter 2023. This analysis covers conventional commercial banks registered in Indonesia, namely Bank Mandiri, Bank Rakyat Indonesia, Bank Negara Indonesia, and Bank Tabungan Negara. The results of the study indicate that conventional commercial banks in Indonesia can manage their specific variables effectively so that financial performance increases and non-performing loans decrease. In addition, the stability of economic conditions contributes to an increase in the volume of available loans, allowing commercial banks to earn higher income from loan interest. Therefore, the banking sector can benefit from some recommendations made in this study, especially concerning conventional commercial banks in Indonesia. © The author(s) 2025. © Mia Ayu Gusti, Alpon Satrianto, Candrianto, Egy Juniardi, Heppy Setya Prima, 2025.
Department of Management, Faculty of Economics and Business, Universitas Negeri Padang [Padang State University], Indonesia; Department of Economics, Faculty of Economics and Business, Universitas Negeri Padang [Padang State University], Indonesia; Agro Industry Logistics Management, Politeknik ATI Padang [ATI Padang Polytechnic], Indonesia; Department of Management, Faculty of Economics, Universitas Sumatera Barat [West Sumatra University], Indonesia; Department of Biology, Faculty of Mathematics and Natural Sciences, Universitas Negeri Medan [Medan State University], Indonesia
