Unveiling the NIM Pathway: How LDR and Efficiency Shape Bank Profitability

Gita Imelda Farel (Universitas Swadaya Gunung Jati)
Mardiyani (Universitas Swadaya Gunung Jati)
Agustina (Universitas Swadaya Gunung Jati)

Indonesian Journal of Business Analytics (IJBA)
Vol. 6 No. 4 (2026): August 2026

This study examines the effects of LDR and operational efficiency on bank profitability, with NIM as the mediating variable. A quantitative associative-causal approach via path analysis (LISREL 10.20) was applied to 38 conventional banks listed on the IDX from 2022 to 2024, selected through purposive sampling. Results show LDR does not have a significant positive effect on profitability, while operational efficiency has a significant negative effect. NIM positively affects profitability; LDR positively affects NIM; operational efficiency negatively affects NIM. NIM serves as a positive mediator between LDR and profitability, and a negative mediator between operational efficiency and profitability, making it the primary mechanism linking intermediation and cost control to bank profit performance. Banks are therefore recommended to maximize interest margins.