The Effect of CAR, NPL, LDR, and BOPO on Net Interest Margin (NIM) in Digital Banks in Indonesia for the 2021-2026 Period (Jurnal Manajemen)

Summary

• The study evaluates a balanced panel of 6 digital banks listed on the Indonesia Stock Exchange covering 108 quarterly observations from 2021Q4 to 2026Q1.p.1
• Bank Jago expanded its total assets from around Rp12.31 trillion in 2021 to Rp36.51 trillion in 2025, becoming the market leader among observed digital banks.p.2
• Bank Aladin Syariah recovered from deep negative margins between 2021 and 2024 to reach a margin of 1.36% in 2025.p.3
• BOPO is the only variable showing a statistically significant negative effect on NIM/NOM with a regression coefficient of -0.0389 at the 1% significance level.p.10
• Asset quality remains controlled across digital banks, presenting a low mean NPL of 0.80% and a median of 0.52%.p.9

Key insights

1. Operating efficiency (BOPO) is the primary internal driver of net interest margin for digital banks in Indonesia, overshadowing capital adequacy, asset quality, and liquidity ratios.p.1
2. Bank Raya Indonesia experienced a gradual asset decline from Rp16.87 trillion in 2021 to Rp13.09 trillion in 2025.p.2
3. Model selection tests confirmed the Random Effects Model as the optimal estimator based on Chow test F (5,98) = 65.43 (p < 0.0001) and Hausman test chi-squared (4) = 2.42 (p = 0.658).p.8
4. High average capital levels (CAR mean of 82.88%) reduce the marginal impact of capital adequacy on interest margin determination.p.11