Green Banking, Loan To Deposit Ratio (LDR) Dan Biaya Operasional Pendapatan Operasional (BOPO) Terhadap Return On Assets (ROA)

Fluctuations in Return on Assets (ROA) in the banking sector listed on the Indonesia Stock Exchange (IDX) from 2022 to 2024 were examined through the influence of green banking policies, the Loan to Deposit Ratio (LDR), and the operating expenses to operating income ratio. Based on data analysis using the Partial Least Squares–Structural Equation Modeling (PLS-SEM) approach, it was found that neither green banking nor LDR variables significantly contributed to determining profitability of assets (ROA). These results indicate that these two parameters were not the main determinants of operational financial performance during the observation period. However, with a coefficient of -0.803, the operating expenses to operating income rasio showed a negative and significant impact on ROA, and its influence was dominant, as reflected in the effect size value (f² = 1.843). Collectively, these three variables explained 66.7% of the variation in ROA (R² = 0.667). The profitability of banking institutions during the study period was more influenced by the level of operational efficiency than by sustainability practices or the scale of credit intermediation. This study adds empirical evidence regarding the effectiveness of green banking implementation in the Indonesian banking sector and confirms that operational efficiency indicators have greater explanatory power regarding financial performance compared to sustainability and liquidity indicators.

Keywords: Green Banking, Loan to Deposit Ratio, Operating Costs, Operating Income, Return on Assets