MODERATING ROLE OF FOREIGN BANK PENETRATION IN BANK COMPETITION, CAR, LDR AND CREDIT RISK

This study aims to analyze the influence of interbank competition, Capital Adequacy Ratio (CAR), and Loan to Deposit Ratio (LDR) on credit risk in national commercial banks in Indonesia during the period 2019-2023, as well as to examine the moderating role of foreign bank penetration in these relationships. The data used are secondary data obtained from the financial statements of banks listed on the Indonesia Stock Exchange (IDX). This research adopts a quantitative approach using Moderated Regression Analysis (MRA). The results show that bank competition and CAR have a significant effect on credit risk, while LDR does not exhibit a significant effect. However, foreign bank penetration is found to moderate the relationship between LDR and credit risk. These findings offer important implications: the higher the loan disbursement (high LDR), the greater the potential for non-performing loans. Therefore, bank management should formulate liquidity strategies that balance fund mobilization and loan disbursement, while maintaining a liquidity buffer to anticipate fluctuations in credit demand and potential defaults.