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p-Index From 2021 - 2026
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All Journal Journal of Accounting and Finance Management (JAFM)
Neneng Susanti
Universitas Widyatama, Bandung, West Java, Indonesia
Economics, Econometrics & Finance

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Capital Adequacy, Operating Efficiency and Non-Performing Loans in Bank Valuation: The Moderating Role of Return on Assets Helni Oktaviani Sabarudin; Neneng Susanti
Journal of Accounting and Finance Management Vol. 7 No. 4 (2026): Journal of Accounting and Finance Management (September - October 2026)
Publisher : DINASTI RESEARCH

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.38035/jafm.v7i4.3938

Abstract

Bank valuation may reflect multiple dimensions of financial performance, yet prior evidence remains inconclusive regarding the valuation effects of capital adequacy, operating efficiency, and credit risk, particularly when profitability is considered as a moderating factor. This study examines these relationships and the moderating role of return on assets in banks listed on the Indonesia Stock Exchange. Using a balanced panel of 43 banks over 2021–2025, yielding 215 firm-year observations, the study employs fixed-effects panel regression and moderated regression analysis. The results show that capital adequacy is positively associated with price-to-book value, whereas operating inefficiency and non-performing loans are negatively associated with bank valuation. Return on assets has no significant direct association with valuation but significantly strengthens the relationship between capital adequacy and price-to-book value. No moderating effects are found for operating efficiency or non-performing loans. The findings indicate that profitability does not uniformly condition the valuation relevance of bank fundamentals but plays a selective moderating role in the capital adequacy–valuation relationship.
Co-Authors Helni Oktaviani Sabarudin