Assessing of Bank Soundness by Risk Profile, Earnings and Capital: Regional Development Bank Case Study in Indonesia

Abstract

As part of the Indonesian banking sector, regional development banks (RDB, known as BPD in Indonesian) have played an important ongoing role in Indonesian economy. This role is channeled through its strong existence in almost each provincial level of Indonesia. This paper aims to investigate the soundness of regional development banks during the period from 2013 through to 2017. Soundness was measured by assessing the risk profile, earning or profitability and capital adequacy of the banks using a composite rank based on BI standard. The results imply that, overall, the RDBs are collectively in a very good condition. Key words— Bank, Regional Development Bank, Risk Profile, Earning, Capital