Comparison of Financial Performance Buku III Indonesian Banks Using Risk-Based Bank Rating (Rbbr) Method: Case Study of PT. Pan Indonesia Bank, Tbk (Panin) and PT. Bank Mega, Tbk (Mega)

*Corresponding Author E-mail: wiwiek.daryanto@ipmi.ac.id Copyright © 2020 Authors. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. 37 plays the intermediary role in the middle of surplus and de icit of the money related segment. To perform well in these exercises, the monetary The inancial business has a critical in luence in the improvement of a nation's monetary development rate, especially in Indonesia. A bank INTRODUCTION Wiwiek Mardawiyah Daryanto / Comparison of Financial Performance Buku III Indonesian Banks Using Risk-Based Bank Rating (Rbbr) Method: Case Study of PT. Pan Indonesia Bank, Tbk (Panin) and PT. Bank Mega, Tbk (Mega) / 37 45


INTRODUCTION
Wiwiek Mardawiyah Daryanto / Comparison of Financial Performance Buku III Indonesian Banks Using Risk-Based Bank Rating (Rbbr) Method: Case Study of PT. Pan Indonesia Bank, Tbk (Panin) and PT. Bank Mega, Tbk (Mega) / 37 -45 organization needs to have a legitimate administration that is pro icient in activating the bank's asset in appropriate way, a capital that is utilized as asset to render the administration, legitimate measure of revenue that will surpass the expense of activity, a legitimate framework that will shield the advantage of the business and a suf icient budgetary situation to settle claims at the hour of liquidity (Adesina, 2012).
Bank wellbeing is the capacity of banks to do banking tasks typically and have the option to satisfy commitments appropriately and in a way that is following relevant inancial guidelines (Budisantoso, 2006). Economic crisis that was incurred in the year of 1997/1998 and 2008 in Indonesia gave a review of the signi icance of estimating the soundness of banks and the versatility framework. The crisis caused liquidity challenges due to the decrease in the conversion scale of the Rupiah against the US dollar, declined productivity of workforce, lastly capital depleted that prompted the inancial business crisis around then (Chitya, 2015). The Century Bank case is one of the cases that occurred in Indonesian banking as an effect of the crisis.
The repetition of the inancial crisis happened due to the fact that banks are trust establishments that are defenseless against huge withdrawals of assets by clients. Rivalry between banks in gathering assets from general society and directing it back as credit, by and by, may digress from appropriate guidelines, for example, not making a difference the judicious rule in offering credit to clients with the goal that it regularly harms investors. Thusly, Bank Indonesia, as a central bank, has a job in both the bank's wellbeing and the lexibility framework estimation. Bank Indonesia gave an arrangement to evaluate the adequacy of banks utilizing the CAMELS strategy dependent on Bank Indonesia Regulation No. 6/10/2004

RESEARCH METHOD
This exploration has considered the bank execution for the period running from 2014 to 2018 where the Indonesian's inancial development is dormant during those periods, and Bank PT. Pan Indonesia Bank, Tbk (Panin) and PT. Bank Mega, Tbk (Mega) faces a few c hanges.
This exploration dissects the inancial health and execution dependent on estimation institutionalized by the Indonesian Financial Service Authority (OJK) under circular letter No. 14/SEOJK.03/2017 and Bank Indonesia Circular Letter No.13/24/DPNP 2011. This exploration utilizes a quantitative technique. The data were collected from the yearly report of the banks, iscal reports, diaries, and articles. Execution examination is utilizing the Risk-Based Bank Rating (RBBR) model. The classi ications utilized in the assessment procedure are Risk pro ile, Earnings, and Capital as appeared in Figure 1.
The Risk-based bank rating technique is the strategy used to quantify the bank's wellbeing.
PT. Bank Mega, Tbk (hereinafter referred to as Mega) was founded in 1969 under the name of PT. Karman bank, it was irstly commenced its commercial operations at Surabaya, East Java. In two years later, it changed its name to PT. Mega Bank and relocating its headquarter to Jakarta. Kaleem (2000) compared the performance of Islamic banks and conventional banks after crisis using inancial ratio. The study found that Islamic banks is more crises-proofed in terms of its asset compared to conventional system. Previos study conducted by Hawaldar et al., (2017) examined the inancial performance of banks after the oil price crisis in Bahrain. The study used the inancial ratio for the period of 2005 -2015. The study found that there was a differences between the performance before and after the oil price crisis.
PT Bank Pan Indonesia, Tbk (hereinafter referred to as PaninBank) is one of the largest Commercial and Retail banks in Indonesia. Bank Panin was established in 1971 as a result of merger from the Bank of Prosperity, Bank Industri Jaya, and Bank Industri Dagang Indonesia. In 1972, Bank Panin obtained a license as a foreign exchange bank, ten years after, PaninBank made an initial public offering as well as being the irst bank in Indonesia to register its shares on the loor stock exchange. Until year of 2018, Bank Panin has more than 560 branch of ices throughout Indonesia, as well as one representative of ice in Singapore (Annual Report of Bank Panin, 2018).
The concept of Financial ratio has been used to measure the performance in various industry, namely oil and gas (Daryanto and Nurfadilah, 2018), banking (Daryanto and Arrifa'I, 2019;Fannywaty and Daryanto, 2019;Pinto et al., 2017), and others.
-39 - Non-performing loans classi ied as substandard, doubtful, and loss. Non-performing loan ratio is a comparison between non-performing loans and total loans. The smaller the NPL ratio, the smaller the credit risk borne by the bank. The higher the NPL ratio, the greater the potential number of uncollected loans, and the resulting decline in bank pro itability. Based on Circular Letter of Bank Indonesia No. 13/30/DPNP dated 16 December 2011, the maximum non-performing loan ratio for a bank is 5% from the total loans given.
Liquidity risk is the risk that the bank can't meet their installment commitments as they fall due, including the withdrawal of client stores. Liquidity mirrors the bank's capacity to satisfy store withdrawals and different liabilities (Permatasari and Sawitri, 2018). A bank is said of having satisfactory liquidity potential when the bank can acquire the essential assets rapidly and at a sensible expense (Greuning and Iqbal, 2011: 143). This examination utilizes a Loan to Deposit Ratio (LDR) to quantify liquidity risk. LDR demonstrates the bank's capacity to repay the withdrawal of assets by investors to depending on credits as a liquidity source (Permatasari and Sawitri, 2018). LDR proportion is a correlation between absolute credits and outsider assets for a similar period. On the off chance that the proportion is excessively high, it implies that the bank might not have enough liquidity to cover any unpredicted store necessities. On the off chance that the proportion is excessively low, the bank may not be gaining as much as it could be. (Investopedia, 2019)

Loan to Deposit Ratio (LDR)
NPL formula:

Good Corporate Governance (GCG)
Great Corporate Governance is a structure that comprised of investors, partners, chiefs, and administrators to set and accomplishes corporate goals and screen execution (Zarkasyi, 2008: 35).

Earnings
In accordance

RESULT AND DISCUSSION
CAR formula:

Risk Pro ile
Net Interest Margin (NIM) is the capacity of banks to create net premium salary by putting bene icial resources possessed by organizations (Sari and Dahar, 2016).

Return on Asset (ROA)
Net Interest Income (NIM) is interest income deducted by interest expense borne by the bank. Productive assets are all assets that generate income in the form of lending, securities, investments, and other investments.
Return on Assets proportion is determined by partitioning income before charge by all out resources. The high ROA implies the organization is pro icient in using its advantages.

ROA formula:
Return on Assets is a marker of how gainful an organization is comparative with its all resources. It shows how effective an organization's administration is at utilizing its advantages for creating income. (Investopedia, 2019) the sustainability of pro itability, and management of earnings. There are two stages for investigating banks' pro it which are:

Capital
Capital appraisal depends on Capital Adequacy Ratio dictated by Bank Indonesia. The Capital Adequacy Ratio (CAR) is an estimation of a bank's cash-low to recognize the bank's risk weighted credit exposures (Investopedia, 2019). CAR is utilized to suit losses that might have to be endured by the banks. The higher the CAR mirrors the bank's capacity to be better in managing the conceivable risk of loss.
Capital is a part of the bank's inancing sources, which can be utilized legitimately to raise another fund, bank capital, as an assurance to retain stuns from loss of business (Greuning and Iqbal, 2011: 213). As per Circular Letter of Indonesia Financial Service Authority No. 14/SEOJK.03/2017, capital factor appraisal incorporates an assessment of capital suf iciency and ampleness of capital administration.
-42 -      risk performance measurement, earnings factor, and capital factor. However, Bank Mega had better performance in terms of Loan to Deposit Ratio (LDR). Therefore, the irst rating rank was Bank Mega compared to Bank Panin. This study give contribution to the body knowledge of inancial literature. The result can be used as a reference to the student about risk rating of banking industry and further future research. In addition, this study has managerial implication where it give a strong insight for managers in bank industry about the inancial health performance that will help them make a better decision with the purpose to increase the market share and the pro itability.