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The Role of Service Quality and Bank Reputation in Building Customer Loyalty: The Mediating Effect of Customer Satisfaction I Nyoman Galih Surya Utama; Ni Made Wahyuni; I Ketut Darma; Ida Bagus Udayana Putra
International Journal of Entrepreneurship and Business  Management Vol. 5 No. 2 (2026)
Publisher : Asosiasi Dosen Peneliti Ilmu Ekonomi dan Bisnis Indonesia (ADPEBI)

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.54099/ijebm.v5i2.1941

Abstract

Purpose – This study examines the effects of service quality and bank reputation on customer loyalty, with customer satisfaction as a mediating variable, among customers of Bank Central Asia (BCA), Gatot Subroto Barat Branch, Denpasar. Methodology/approach – A quantitative causal-associative design was employed. The population consisted of 9,800 customers, from which 100 respondents were selected using random sampling and the Slovin formula. Primary data were collected through a Likert-scale questionnaire and analyzed using Structural Equation Modeling–Partial Least Squares (SEM-PLS) with SmartPLS 4.0. Findings – Service quality has a positive and significant direct effect on customer loyalty, whereas bank reputation does not have a significant direct effect. Both service quality and bank reputation positively and significantly influence customer satisfaction. Customer satisfaction also has a positive and significant effect on customer loyalty and emerges as the strongest determinant in the model. Furthermore, customer satisfaction significantly mediates the relationships between service quality and customer loyalty, and between bank reputation and customer loyalty. The mediation is partial for service quality and full for bank reputation. Novelty/value – This study demonstrates that a strong bank reputation alone is insufficient to create customer loyalty unless it is translated into customer satisfaction. It also clarifies the distinct mediating mechanisms through which service quality and bank reputation build loyalty in a branch-level banking context.