The Role of Firm Size on Bank Liquidity and Performance: A Comparative Study of Domestic and Foreign Banks in Indonesia

Abstract: The purpose of this study is (1) to find out the effect of Non-Performing Loan (NPL), Net Interest Margin (NIM), Non-Interest Income, and Loan to Deposit Ratio (LDR) to Return on Assets (ROA) with size as control variable; and (2) to compare whether there is a difference between domestic and foreign banks of the period 2012 – 2017. The sample of this study is 228 domestic and foreign banks listed in Indonesia Stock Exchange (IDX) of the period 2012 – 2017. The result of the analysis show that (1) in the domestic bank, NPL has a negative effect on ROA; NIM has a positive effect on ROA; and (2) in foreign banks, NPL has a negative effect ROA; NIM has a negative effect; LDR has a negative effect ROA. Further, size becomes a control variable and there is no difference between domestic and foreign banks