Ownership Structure And Bank Performance During Economic Crisis In Indonesia

Indonesia had the economic and political crisis in mid-1997 through 1999. This crisis resulted in bank performance down even a loss. The banks are also experiencing financial hardship issues, loan loss and the threat bangkrup. A unique characteristic of Indonesian banking system is the existence of regional development banks (Bank Pembangunan Daerah), which is owned by local governments. This study examines the performance of this type of banks compared to private between regional development banks and federal government banks. Also this study examines the factors influence of bank performance. Measurement bank performance are Return On Assets (ROA) and Return On Equity (ROE). The sample of this study consists of 15 community development banks, 56 private banks, and 3 central government banks from 1997 to 1999. Using panel data methodologies, we find that community development banks and federal government banks perform at least as good as the private banks. Dummy equity, economic growth, equity ratio, loan ratio, cost ratio and total assets influence bank performance during economic crisis in Indonesia