ANALYSIS OF THE INFLUENCE OF BANK SOUNDNESS LEVEL ON PROFITABILITY AT PT BPR RAMOT GANDA, WEST NUSA TENGGARA PROVINCE

Abstract

This study was conducted to analyze the impact of a bank's financial health on profitability at PT Bank Perekonomian Rakyat (BPR) Ramot Ganda in West Nusa Tenggara Province. Bank soundness was measured using the Capital Adequacy Ratio (CAR), Quality of Earning Assets (KAP), Operating Expenses to Operating Income Ratio (BOPO), and Loan-to-Deposit Ratio (LDR), while profitability was measured using Return on Assets (ROA). A quantitative approach was employed, utilizing an associative method. The data used consists of secondary data derived from the financial statements of PT BPR Ramot Ganda for the 2020–2024 period. The data was analyzed using multiple linear regression with SPSS as the analytical tool. The results of the study found that CAR, KAP, BOPO, and LDR simultaneously influence ROA. Partially, KAP and BOPO exhibit a negative influence on ROA, while CAR and LDR exhibit a positive influence on ROA. The research findings indicate that the quality of productive assets and operational efficiency are key factors influencing the bank's profitability. Therefore, management needs to improve the quality of lending, minimize non-performing loans, and control operating costs in order to sustainably increase profitability. In addition, optimal capital and liquidity management is also necessary to support the bank's financial performance