NON-PERFORMING LOAN DETERMINANT ON RETURN ON ASSETS IN OPEN BANKING COMPANIES IN INDONESIA

The bank accepts deposits from the public (third party funds) in the form of savings, current accounts and deposits. Furthermore, these funds can be returned in the form of credit to the public. Banking in Indonesia in general is influenced by many factors, some of which are macroeconomic factors originating from outside the banking sector and microeconomics which tend to be from within the banking sector itself. The purpose of this study was to determine and analyze the effect of macroeconomic variables, leverage ratios and liquidity on ROA both directly and through NPL. The data used is secondary data obtained from reliable sources. This research uses path analysis method with the help of smart PLS. The results of this study have a significant macroeconomic influence on NPL. The leverage and liquidity ratios have no significant effect on NPL. This means that a positive regression coefficient value means that any increase in leverage ratio will increase the NPL and the effect shown is not significant. Macroeconomic and leverage ratios have no significant effect on ROA. Liquidity ratio has a significant effect on ROA. NPL has a significant negative effect on ROA. This means that any increase in NPL will cause the ROA value to decrease. Liquidity has no significant effect on ROA through NPL. Macroeconomic and leverage ratios have a significant effect on ROA through NPL