Analysis of Banking Health before and During Covid-19 Using the RGEC Method
Suci Wiji Astuti *
Accounting, Faculty of Economics and Business, University of Lampung, Indonesia.
Lindrianasari
Accounting, Faculty of Economics and Business, University of Lampung, Indonesia.
Ratna Septiyanti
Accounting, Faculty of Economics and Business, University of Lampung, Indonesia.
Tri Joko Prasetyo
Accounting, Faculty of Economics and Business, University of Lampung, Indonesia.
Usep Syaipudin
Accounting, Faculty of Economics and Business, University of Lampung, Indonesia.
*Author to whom correspondence should be addressed.
Abstract
Aims: This study aims to investigate the health condition of the banking sector before and during the Covid-19 pandemic.
Study Design: This study uses a quantitative descriptive approach to evaluate the condition of the banking sector by analyzing the annual reports published on each bank's website.
Place and Duration of Study: The author uses data from banking financial reports in Indonesia for the Bank Group Based on Core Capital (KBMI), which consists of one to four banks in the 2018-2021 period.
Methodology: The RGEC model (Risk Profile, Good Corporate Governance, Earning, Capital) was utilized to analyze the data, assessing various aspects including risk profile, corporate governance, profitability, and capital adequacy.
Results: The study's findings indicated that among KBMI 1, 3, and 4 banks, there were significant differences in banking Non-Performing Loans (NPLs) before and during Covid-19, while no significant differences were observed in Good Corporate Governance (GCG), Return on Assets (ROA), and Capital Adequacy Ratio (CAR). In the case of KBMI 2 bank, there were no significant differences observed in NPLs, GCG, ROA, and CAR before and during Covid-19. The NPL ratio, which measures credit risk or financing provided to third parties, showed no significant difference between the average NPL ratio before and during Covid-19.
Conclusion: The advent of the Covid-19 era has resulted in a decline in the stability of banks, suggesting a reduced ability to maintain stability, efficiency, and the quality of credit ratios. However, overall, the banking sector during Covid-19 still remained in the "good" category based on the standards set by Bank Indonesia.
Keywords: Covid-19, KBMI, bank health, RGEC