Comparison Between Risk and Return of Financial Conglomerates in Indonesia: Vertical, Horizontal and Mixed (TOPSIS Analysis)

Financial conglomeration in Indonesia is a unique form because Indonesia has three financial conglomeration types that existed. There are vertical, horizontal, and mixed types. In fact, many countries are implementing vertical financial conglomerates because the supervision is easier to carry out than other types. This study tried to compare the performance of vertical, horizontal, and mixed financial conglomerates. Is it true that a vertical financial conglomerate is the best financial conglomerate compared to a horizontal and mixed one with the TOPSIS (Technique for Order Preference by Similarity to Ideal Solution) analysis? This study used return indicators and risk indicators to measure financial conglomerates' performance in the banking industry. The results showed that vertical financial conglomerates were the most superior compared to horizontal and mixed financial conglomerates. It might be attributed that vertical financial conglomerates usually have the same activities and have an explicit direct relationship between the parent company and subsidiary company so as it is more easily to supervising.