THE EFFECT OF CAR, NPL, AND IT INVESTMENT ON ROA IN BANKING SECTOR COMPANIES LISTED ON THE IDX

Abstract

This study aims to provide empirical evidence regarding the effect of Capital Adequacy Ratio (CAR), Non-Performing Loan (NPL), and IT Investment on Return On Assets (ROA) in banking companies listed on the Indonesia Stock Exchange during the 2016-2025 period. This study employed a quantitative method with a causal associative approach. Hypothesis testing was conducted using multiple linear regression analysis. The research sample was selected using purposive sampling, resulting in 10 banking companies with a total of 80 observation data analysis using SPSS software. The results indicate that Capital Adequacy Ratio (CAR) has a positive and significant effect on Return On Assets (ROA), while Non-Performing Loan (NPL) has no significant effect on ROA. Meanwhile, IT Investment has a positive and significant effect on Return On Assets (ROA). Simultaneously, CAR, NPL, and IT Investment were proven to have a significant effect on Return On Assets (ROA). These findings indicate that strength capital adequacy and effective technology investment play important roles in improving bank profitability, while the level of non performing loan has not yet had a significant impact on profitability of banking. R² value of 27.3% shows that CAR, NPL, and IT Investment can explain part of the variation in ROA, while the rest is influenced by other factors.