Finances, accounting and audit

Maximizing efficiency and profit through productive asset management and risk control

Economic Annals-XXI

Economic Annals-XXI: Volume 204, Issue (7-8), Pages: 50-56

Citation information:
Prihatna, N., Nidar, S. R., Anwar, M., & Herwany, A. (2023). Maximizing efficiency and profit through productive asset management and risk control. Economic Annals-XXI, 204(7-8), 50-56. doi: https://doi.org/10.21003/ea.V204-07

EA-XXI-V204-07Download PDF

Nana Prihatna
MA (Economics),
Faculty of Economics,
Universitas Padjadjaran
Jatinagor, Jawa Barat, 40132, Indonesia
nanaprihatna24@gmail.com
ORCID ID: https://orcid.org/0009-0000-0876-2825

Sulaeman Rahman Nidar
PhD (Economics),
Faculty of Economics,
Universitas Padjadjaran
Jatinagor, Jawa Barat, 40132, Indonesia
sulaeman.rahman@unpad.ac.id
ORCID ID: https://orcid.org/0000-0002-9780-2012

Mokhamad Anwar
PhD (Economics), Professor,
Faculty of Economics,
Universitas Padjadjaran
Jatinagor, Jawa Barat, 40132, Indonesia
mokhamad.anwar@unpad.ac.id
ORCID ID: https://orcid.org/0000-0003-2641-7667

Aldrin Herwany
PhD (Economics),
Faculty of Economics,
Universitas Padjadjaran
Jatinagor, Jawa Barat, 40132, Indonesia
aldrin.herwany@fe.unpad.ac.id

Maximizing efficiency and profit through productive asset management and risk control

Abstract. This study aims to examine data and information related to the effect of productive asset management and risk control, both on operational efficiency (OER) and on the profitability of rural banks in West Java, Indonesia. This study was designed with the Ex Post Facto research method with descriptive-verification/associative objectives, namely providing descriptions and testing the relationship between variables (hypothetical testing) with the investigation type of causal relationship and correlation between variables. The unit of analysis is rural banks in West Java, with 26 cities/regencies, and one of the rural banks with the largest assets and complete financial data were chosen. This study observed its financial performance sourced from Bank Indonesia and the Financial Services Authority (2014), in the form of financial reports from each rural bank from 2010 to 2019, with consideration prior to the COVID-19 pandemic. The research findings resulted in a novelty, namely the Model of OER and Profitability (NPM and NIM) of rural banks which revealed that efforts to improve the performance of a healthy rural bank in West Java need to be supported by good management of productive assets and risk control.

Keywords: Bank; Rural Bank; Productive Asset Management; Risk Control; Operational Efficiency; OER; Profitability; Financial Performance; West Java; Indonesia

JEL Classifications: Е24; Е41; Е64; I18; J28; J31

Acknowledgements and Funding: The authors received no direct funding for this research.

Contribution: The authors contributed equally to this work.

Data Availability Statement: The dataset is available from the authors upon request.

DOI: https://doi.org/10.21003/ea.V204-07

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Received 20.02.2023
Received in revised form 12.04.2023
Accepted 16.04.2023
Available online 27.08.2023

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