The Effect of Lending and Capital Adequacy on Profitability PT Bank Pembangunan Daerah Jawa Barat and Banten TBK with Credit Risk as a Moderating Variable

This study examines the effect of Lending and Capital Adequacy on the profitability of PT Bank Pembangunan Daerah Jawa Barat and Banten Tbk, with Credit Risk as a moderating variable. Profitability is an important indicator of banking performance because it reflects the bank’s ability to generate profits and maintain financial sustainability. In the banking industry, lending activities and adequate capital management are considered crucial factors influencing profitability, while credit risk may strengthen or weaken these relationships. Therefore, this research aims to analyze the influence of Loan to Deposit Ratio (LDR) and Capital Adequacy Ratio (CAR) on Return on Assets (ROA), as well as to examine the moderating role of Non-Performing Loans (NPL). The study employed a quantitative research method using secondary data obtained from the annual financial statements of PT Bank Pembangunan Daerah Jawa Barat and Banten Tbk during the 2015–2024 period. Data analysis techniques included descriptive analysis, Augmented Dickey-Fuller (ADF) stationarity testing, and moderated regression analysis. The findings indicate that CAR has a negative and significant effect on profitability, while LDR does not significantly affect profitability. Meanwhile, NPL has a positive and significant effect on profitability. Furthermore, the moderation analysis reveals that credit risk does not significantly moderate the relationship between LDR, CAR, and profitability. In conclusion, effective capital management and credit risk control are essential for maintaining bank profitability and financial stability.