The Impact of Financial Risk on Financial Performance: Evidence from Indonesian Banks
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The purpose of this analysis is to comprehend the impact of credit risk, liquidity risk, reputation risk, bank size, and financial risk on financial performance. Over the course of the year (2016–2021), data was collected from 35 Indonesian banking companies listed on the Indonesian Stock Exchange. SEM model analysis with STATA is one of the approaches used in data analysis. The study's findings demonstrate that credit risk has no effect on financial performance (EPS and ROE), liquidity risk has an effect on financial performance, reputation risk has no effect on financial performance, and the size of the bank has an effect on financial performance (EPS and ROE). This study is aimed at providing financial managers with information on corporate financial reporting and banking financial performance. Furthermore, financial managers can assess banking risks that may have an impact on a bank's financial performance.
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