<![CDATA[Abstract: In confront with banks and its higher core capital, the profitability of banks categorized in BUKU 1 and BUKU 2 Banking Sectors exhibit a downward trend. This study aims to investigate what actually are the determinants of this downward trend over the period of 2010-2017 using 20 banks categorized in BUKU 1 and BUKU 2 Banking Sector as the sample. A panel data regression with fixed effects is used in this analysis. Based on the empirical results, the banks suffer from low quality of loans distribution and do not manage to extract considerable profits from the utilization of their high capital. Despite low profits from the core banking activities bank includes relied benefit from their high interest margin. In accordance with the hypotheses, the Operating Expenses to Operating Income has a negative significant impact to ROA. Concisely, Net Interest Margin and Operating Expenses to Operating Income have significant negative impacts to ROA while Capital Adequacy Ratio, Non-Performing Loan and Loan to Deposit Ratio have insignificant negative impacts to ROA. Therefore, bank includes should pay more attention to their capital utilization, reduce cost and keep the value of all ratios as what has been set by BI. Keywords: banking, profitability, buku 1, buku 2   ]]>
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