<![CDATA[This study examines the liquidity–risk–profitability nexus in Indonesian commercial banks over the 2015–2024 period, with particular emphasis on how liquidity, credit risk, and capital adequacy shape bank profitability. It incorporates varying macroeconomic conditions, including the pre-pandemic period, the COVID-19 crisis, and the phase of monetary policy normalization, to capture dynamic financial responses. The research highlights the importance of strategic bank decisions in balancing risk management and intermediation functions. A quantitative panel data approach with sequential panel modeling is employed. In the first stage, the effects of policy interest rates and inflation on liquidity, proxied by the Loan to Deposit Ratio (LDR), are analyzed. The second stage evaluates the influence of LDR and Capital Adequacy Ratio (CAR) on credit risk, measured by Non-Performing Loans (NPL), using fixed effect estimation. The third stage assesses the impact of LDR, CAR, and NPL on profitability, proxied by Return on Assets (ROA), using random effect estimation. Dummy variables and interaction terms are included to compare state-owned and private banks, with robust standard errors ensuring reliability. The findings reveal a clear risk–return trade-off, where liquidity and capital management play crucial roles in maintaining profitability and financial stability.]]>
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