Monitoring the Efficiency of BUMN Banks in Indonesia: Comparison with BUMS Banks

Abstract

Badan Usaha Milik Negara (BUMN) is a State-Owned Enterprises (SOEs) in Indonesia, were created to carry out commercial activities acting on behalf of the government. It means that BUMN management is quite specific because of dualism, firstly BUMNs are in the field of public governance with intervention from the government, and secondly BUMNs are autonomous business entities that have dual objectives are social and economic. This is claimed as a source of inefficiency of BUMN, opposite to Badan Usaha Milik Swasta (BUMS) which purely commercial business entity. This research aims to analyze the differences of BUMN and BUMS efficiency in banking industry. Research population is taken from public listed companies in Indonesia since 2013 to 2017 with purposive sampling way. Data analyzing technique is uses a comparison of two samples with t-test. The result shows that the two variables: Leverage multiplier and loan to deposit ratio different between BUMN banks and BUMS banks and the rest three variables: Interest expense ratio, cost of efficiency ratio and cost of fund are indifferent between BUMN banks and BUMS banks. This research found that BUMN banks more efficient and more aggressive than BUMS banks in their banking operations.