THE EFFECT OF CONCENTRATED OWNERSHIP ON BANK PROFITABILITY IN INDONESIA

Michelle Priscilla Amanda, Serafina Lam, Rinaningsih ., Yang Elvi Adelina

Abstract


Abstract 

This paper examines the association between concentrated ownership and the profitability of banks in Indonesia during the period from 2012 to 2018 with a total sample of 93 banks or 651 observations. This study applies the Random Effect regression method, and reveals a non-significant association between concentrated ownership and bank profitability as measured by ROA and ROE. It indicates that a majority of shareholders tend to use their power to exploit minority shareholders, which can also strengthen the monitoring effect. However, the regression also indicates that there is a significant non-linear relationship between concentrated ownership and profitability when measured by ROE. There is a mixed-effect between concentrated ownership and profitability  in the case of Indonesian banks. Moreover, a regression is also utilized with dummy variables of concentrated ownership (FIN and IND) to assess the difference between non-financial institution ownership and financial institution ownership. The results show no significant difference in cases. This can be caused by institutional ownership (financial institutions), which only acts as a short-term trader that emphasizes short-term profits. Therefore, its existence as a shareholder is not any different to the presence of non-financial institution ownership. The findings of this study show that the application of POJK No. 56/POJK.03/2016 regarding Share Ownership of Commercial Banks which regulates the maximum limit of concentrated ownership in banks may not work effectively in strengthening bank performance.

Keywords: Concentrated ownership, banks, OJK regulations, bank performance, expropriation.


Abstrak 

Penelitian ini bertujuan untuk meneliti pengaruh kepemilikan terkonsentrasi terhadap profitabilitas bank di Indonesia pada periode tahun 2012 sampai dengan tahun 2018 dengan sampel sejumlah 93 bank atau 651 observasi. Pengujian dengan metode regresi Random Effect menunjukkan hubungan tidak signifikan antara kepemilikan terkonsentrasi dengan profitabilitas bank yang diukur dengan ROA dan ROE. Hal ini mengindikasikan bahwa pemegang saham mayoritas bukan hanya dapat memanfaatkan kekuasaan yang dimilikinya untuk mengekspropriasi pemegang saham minoritas, namun juga dapat memperkuat pelaksanaan fungsi pengawasan. Selain itu, hasil regresi juga menunjukkan bahwa terdapat hubungan signifikan non-linear antara kepemilikan terkonsentrasi dan profitabilitas ketika diukur menggunakan ROE. Maka dari itu, pada kasus bank di Indonesia, terdapat mixed-effect terkait kepemilikan terkonsentrasi dan profitabilitas. Selanjutnya, regresi dengan menggunakan variable dummy dari kepemilikan terkonsentrasi (FIN dan IND) untuk melihat apakah ada perbedaan pada performa bank yang dikuasai oleh lembaga keuangan dan non-lembaga keuangan. Hasilnya menunjukan tidak adanya perbedaan signifikan. Hal ini dapat disebabkan ketika kepemilikan lembaga keuangan hanya bertindak sebagai investor jangka pendek atau short-term trader yang tujuannya adalah keuntungan jangka pendek. Sehingga kehadiran dari kepemilikan lembaga keuangan tersebut tidak berbeda dari kehadiran kepemilikan lembaga non-keuangan. Hasil dari penelitian ini menunjukkan bahwa penerapan POJK Nomor 56/POJK.03/2016 tentang Kepemilikan Saham Bank Umum, yang mengatur batasan maksimum kepemilikan terkonsentrasi pada perbankan, untuk membantu meningkatkan performa bank belum berjalan secara efektif.

Kata Kunci: Kepemilikanterkonsentrasi, bank, peraturan OJK, performa bank, ekspropriasi.


Keywords


Concentrated ownership; banks; OJK regulations; bank performance; expropriation; Kepemilikanterkonsentrasi; bank; peraturan OJK; performa bank; ekspropriasi.

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