The Effect of Operational Risk on Bank Profitability in the Era of Economic Recovery

Abstract

This study aims to analyze the effect of operational risk on bank profitability in Indonesia during the period from March 2022 to March 2023. Operational risk is represented by the Biaya Operasional terhadap Pendapatan Operasional (BOPO) ratio or Operational Expense to Operational Income, while profitability is measured by Return on Assets (ROA). The research employs a quantitative approach using secondary data from the Statistik Perbankan Indonesia (SPI) published by the Financial Services Authority (Otoritas Jasa Keuangan/OJK). Data analysis was performed through simple linear regression using SPSS software. Descriptive results show that Indonesian banks maintained moderate operational efficiency and relatively stable profitability throughout the observation period. Classical assumption tests confirm that the regression model satisfies the assumptions of normality, homoscedasticity, and independence. The regression results indicate that Operational Expense to Operational Income has a negative but insignificant effect on Return on Assets, suggesting that higher operational costs tend to reduce profitability, although the impact is not statistically significant. The study highlights the importance of improving operational efficiency, cost management, and digital transformation strategies to sustain profitability in the post-pandemic banking recovery phase