Analysis of the Effect of Loan to Deposit Ratio, Non-Performing Loans and Capital Adequacy Ratio on Return on Assets with Good Corporate Governance as Intervening Variable in Banking Companies

The purpose of this study was to examine the effect of loan to deposit ratio (LDR), non-performing loans (NPL), and capital adequacy ratio (CAR) on return on assets (ROA) in banking companies listed on the Indonesian Institute for Corporate Governance (IICG) in 2014-2018. This study uses Good Corporate Governance (GCG) as an Intervening variable. The use of intervening variables GCG in this study is a recent breakthrough in increasing return on assets. The sampling technique is purposive sampling. With this sampling method, the samples used in the study were 10 of the best banking companies implementing Good Corporate Governance registered in The Indonesian Institute for Corporate Governance (IICG) in 2014-2018. This study uses secondary data obtained from SWA Magazine publications. The analysis technique used in this study is path analysis. The results of the first structural equation model that LDR and NPL have a significant negative effect on GCG and CAR has a positive significant effect. The results of the second structural equation model that NPL, CAR, GCG have an influence on ROA, but LDR does not have a significant effect. The implication of this research is that GCG as a very large variable intervening plays a role in banks in increasing ROA.