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Does Risk Management Improve Financial Performance? Empirical Evidence from Indonesian Listed Banks Candera, Mister; Safitri, Ervitas; Feryaldo, Rozzy
Innovation, Technology, and Entrepreneurship Journal Vol 3 No 1 (2026)
Publisher : Universitas Muhammadiyah Magelang

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.31603/itej.16037

Abstract

This study aims to test and analyze the influence of risk management on financial performance in banking sector companies listed on the Indonesia Stock Exchange. This study uses a quantitative approach with secondary data. The study population consisted of 47 banking companies, with a sample of 19 companies selected using purposive sampling techniques over five years, resulting in 95 data observations. The analysis methods used include multiple linear regression, F test, t test, and determination coefficient. The results of the study show that risk management has a significant effect on financial performance. Partially, credit risk and liquidity risk have a positive and significant effect on financial performance, while operational risk has a negative and significant effect on financial performance. A determination coefficient (R²) value of 32.2% indicates that variations in financial performance can be explained by risk management variables, while the rest is influenced by other factors outside the research model.