Sembalangi, Nadella Maharani and Bustaman, Yosman (2019) Analysis of Diversification on Bank Risk: Evidence from Indonesian Commercial Banks 2010-2018. Bachelor thesis, Swiss German University.

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Abstract

The purposes of this study are to investigate the relationship of each component diversification; revenue, asset, liability, and geographic diversification toward bank risk in Indonesia commercial banks. The relationship between diversification components and bank risk are analyzed individually using panel data. Observation of 50 Indonesian commercial banks are included for the period of 2010-2018. The Herfindahl-Hirschman index (HHI) and natural logarithm (Ln.) are used as the diversification determinants while bank risk is proxied by Z score. In the analysis control variables also considered using macroeconomic factors and banks specific factors. GDP and inflation used as proxies for macroeconomic factors while bank size, capital adequacy, and liquidity are the proxies for banks specific factors. This study provides several findings for bank diversification. Revenue diversification found to be an opportunity for commercial banks to increase stability and avoid insolvency risk as current commercial banks still focus on traditional activities. The same result found in asset diversification. On the contrary, diversification within non-interest income, liability and geographic diversification found to increase bank risk.

Item Type:	Thesis (Bachelor)
Uncontrolled Keywords:	Revenue Diversification ; Assets Diversification ; Liability Diversification ; Geographic Diversification ; Non-Interest Income
Subjects:	H Social Sciences > HF Commerce > HF5601 Accounting H Social Sciences > HG Finance H Social Sciences > HG Finance > HG1501-3550 Banking
Divisions:	Faculty of Business Administration and Communication > Department of Accounting
Depositing User:	Adityatama Ratangga
Date Deposited:	15 May 2020 06:07
Last Modified:	20 May 2020 03:49
URI:	http://repository.sgu.ac.id/id/eprint/312

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