THE EFFECT OF CAR, NPL, LDR, AND BOPO ON NET INTEREST MARGIN (NIM) IN DIGITAL BANKS IN INDONESIA FOR THE 2021-2026 PERIOD

The rapid expansion of digital banking in Indonesia has intensified competition and put pressure on early-stage profitability. This study examines the effect of the Capital Adequacy Ratio (CAR), Non-Performing Loan (NPL), Loan to Deposit Ratio (LDR), and Operating Expenses to Operating Income (BOPO) on the Net Interest Margin (NIM), with the Net Operating Margin (NOM) as its Islamic-banking counterpart, of digital banks in Indonesia over the 2021Q4-2026Q1 period. The study is grounded in the dealership model of bank interest margins and the Risk-Based Bank Rating (RGEC) framework. A balanced panel of six digital banks listed on the Indonesia Stock Exchange is analysed, yielding 108 quarterly observations estimated in EViews 12 with robust standard errors. Following the Chow and Hausman tests, the Random Effects Model is adopted as the main specification, with the Fixed Effects Model reported as a robustness check. The results show that BOPO has a negative and significant effect on the margin, while CAR, NPL, and LDR are not significant. The findings indicate that operating efficiency, rather than capital adequacy, asset quality, or liquidity, is the dominant determinant of the margin at the current stage of digital-banking development in Indonesia. Digital banks are therefore encouraged to strengthen cost efficiency through technology optimisation and process automation.