The Impact of Capital Adequacy, Credit Risk, and Operational Efficiency on the Profitability of State-Owned Banks in Indonesia (2014-2023)

This study examines the impact of internal banking factors, including capital adequacy, credit risk, and operational efficiency, on the profitability of state-owned banks in Indonesia from 2014 to 2023. A quantitative approach is employed, utilizing secondary data obtained from the Financial Services Authority (OJK) website and the financial reports of state-owned banks. The results indicate that capital adequacy negatively and significantly impacts the profitability of state-owned banks, whereas credit risk has a positive but statistically insignificant effect. Furthermore, operational efficiency shows a negative and significant correlation with bank profitability. These insights are anticipated to provide useful guidance for policymakers in formulating strategies aimed at improving the profitability of state-owned banks.