The Effect of Green Banking and Capital Adequacy Ratio on Profit in State-Owned Banks Listed on the Indonesia Stock Exchange

Abstract

This study analyzes the impact of green banking and Capital Adequacy Ratio (CAR) on the profits of state-owned banks (BUMN) listed on the Indonesia Stock Exchange from 2014 to 2023. Key issues include the operational dependence of banks on electricity and paper, which hinders the significant impact of green banking on profits. Annual report data from the official bank websites were used, with a sample of 4 state-owned banks. The research method is descriptive quantitative with panel data regression analysis using Eviews 12 software. The results show that green banking does not significantly affect the profits of state-owned banks, while CAR has a significant impact due to compliance with Bank Indonesia's minimum capital adequacy regulation of 8%. Simultaneously, green banking and CAR significantly affect the profits of state-owned banks. The combination of effective green banking implementation and adequate CAR positively contributes to profit increases through operational cost savings, enhanced customer trust, and increased business activity and bank revenue.