Contingency Factors, Risk Management, and Performance of Indonesian Banks

Abstract

The purpose of this study is to examine the effect of enterprise risk management (ERM) and credit risk management (CMR) on Indonesian bank performance. This study also investigates the moderating role of bank contingency factors on those impacts. By exploring purposive sampling method, 24 Indonesian public listed Banks were selected as the sample of this study for four years observations.

This study found ERM and CRM positively influence on Indonesian bank performance. This study also reported that the influencing of ERM on Bank performance will be stronger for large bank and the bank which operate in higher environmental uncertainty, higher complexity, and lower independent board monitoring. In contrast this study provide an empirical evidence on strangtern CRM-bank performance relationship will be exist for small bank and the bank which operate in lower environmental uncertainty, lower complexity, and higher independent board monitoring.