PENGARUH CORPORATE GOVERNANCE DAN RISIKO KREDIT TERHADAP PROFITABILITAS PERBANKAN YANG TERDAFTAR DI BURSA EFEK INDONESIA TAHUN 2016-2018

Abstract

Corporate governance is represented by the structures and processes laid down by a corporate entity to minimize the extent of agency problems. The need for corporate governance is particularly crucial in the banking sector. It can further help in reducing bank failure by taking appropriate steps at the right time, for example is credit risk. Credit risk emanates directly from the lending activities of banks.The purpose of this study was to analyze the effect of corporate governance and credit risk to profitability in banking sector.Samples of this study are banking companies listed in Indonesia Stock Exchange over periode 2016 until 2018. This study finds that corporate governance have positive and significant effect on profitability. The results also showed that credit risk have negative and significant effect on profitability in banking sector.

Key words: corporate governance, credit risk and profitability.