Credit risk and operational efficiency as determinants of Bank Mandiri stock prices

Abstract

Purpose: to analyze the effect of the non-performing loan (NPL) ratio and the operating expenses on the operating income (OEOI) ratio on Bank Mandiri’s stock price.

Method: this study employs a quantitative explanatory research method using secondary data from Bank Mandiri’s annual financial statements and stock prices for the period 2014–2024. The analysis includes descriptive statistics, classical assumption tests, and multiple linear regressions to examine the effects of NPL and OEOI on the stock price.

Findings: the NPL ratio has no significant effect on Bank Mandiri’s stock price, while the OEOI ratio has a significant negative effect. These results indicate that stock price movements are more sensitive to operational efficiency than to credit risk during the observed period.

Implications: operational efficiency strongly influences stock prices, highlighting the importance for banks to manage costs effectively and for investors to consider efficiency alongside credit risk in investment decisions.

Originality: providing updated empirical evidence on how NPL and OEOI ratios influence Bank Mandiri’s stock price, addressing inconsistencies in previous research, and focusing specifically on the latest financial performance and market response in the Indonesian banking sector.