THE INFLUENCE OF INTEREST INCOME, NON-INTEREST INCOME, AND INCOME DIVERSIFICATION ON RISK- ADJUSTED RETURN ON ASSET OF STATE-OWNED COMMERCIAL BANKS IN INDONESIA LISTED IN THE INDONESIA STOCK EXCHANGE PERIOD 2003-2014

Abstract

This study investigated the influence of interest income, non-interest income, and diversification income towardprofitability which is proxied by Risk-adjusted return on assets (RAROA), using 4 sample of state-ownedcommercial banks in Indonesia listed atIndonesia Stock Exchange period 2003-2014.In this study, researcher using panel data analysis. Variables used in this research are the interestincome, non-interest income, and income diversificationas an independent variable and profitability of the bankwhich is proxied by Risk-adjusted Return on Assets as the dependent variable with a significance of 95%.Based on test results using panel data regression, itcan be concluded that the interest income, non-interest income, and income diversification, simultaneously have a significant influence on Risk-adjusted Returnon Assets. Non-interest income partially not have a significant impact Risk-adjusted Return on Assets., whereasinterest income and income diversification has a significant influence partially on Risk-adjusted Return on Assets