Analysis of Factors Affecting Profitability Digital Bank in Indonesia

Rapid technological advances in recent years have encouraged banks to become digital banks, especially after the COVID-19 outbreak which accelerated the use of digital financial services. The purpose of this study is to look at how CAR, BOPO, LDR, and bank size affect the profitability of Indonesian digital banks. Profitability is measured using ROA as the dependent variable and CAR, BOPO, LDR, and bank size as the independent factors. This study applies a quantitative methodology, specifically panel data regression analysis. The research sample encompasses of 9 digital banks in Indonesia selected with a purposive sampling approach. The sample selection criteria include digital banks that are registered in Indonesia and have disseminated quarterly financial reports from Q1 2022 to Q4 2023 in the financial statements of the Financial Services Authority (OJK). The results show that CAR has a positive and substantial effect on ROA, but BOPO has a negative and significant impact on ROA. Furthermore, LDR and bank size show a favorable and sizable impact on ROA.