THE EFFECT BETWEEN CAPITAL, LIQUIDITY RISK, CORPORATE GOVERNANCE ON FINANCIAL PERFORMANCE MEDIATED BY CREDIT GROWTH (STUDIES ON CONVENTIONAL COMMERCIAL BANKS LISTED ON THE INDONESIA STOCK EXCHANGE)

Abstract

Purposes - This research was conducted after examining the condition of financial performance at banks in
Indonesia, there are many banks have financial performance below the industry average. Research on the
factors that affect financial performance is motivated by the phenomenon and uniqueness of the aspects of
capital, liquidity risk, and corporate governance. The phenomenon of relatively high capital in banks in Indonesia where the level of capital is at the highest level in Asia and the third highest in the world is the reason for research on capital. The phenomenon of the large number of banks violating the limits of liquidity
risk as well as the uniqueness of the method of assessing corporate governance at banks in Indonesia also
encourages research on liquidity risk factors and corporate governance in relation to the financial performance of the Bank.
Design / methodology / approach - This research was conducted at conventional commercial banks listed
on the Indonesia Stock Exchange with an observation period of 2015-2019. The analysis method uses panel
data regression analysis and path analysis.
Findings - The results were founded that capital and good corporate governance were able to support the
financial performance of the bank, while liquidity risk did not support the financial performance of the bank.
The amount of capital held is not able to boost credit growth, but liquidity risk encourages credit growth.
Credit growth is not able to mediate the effect of capital and liquidity risk on the financial performance of
the Bank. The results show that violations of liquidity risk limits in lending were a serious problem for
banks in Indonesia.
Originality / value - Research on the financial performance of conventional banks in Indonesia by mediating credit growth