Productive Asset Management and Risk Control In Increasing Operation Efficiency and Profitability (Study on Rural Banks in West Java Province, Indonesia)

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This study aims to examine data and information related to the effect of productive asset management and risk control, both on operational efficiency and on the profitability of rural banks in West Java, Indonesia. This study was designed with the Ex Post Facto research method with descriptive-verificative/associative objectives, namely providing descriptions and testing the relationship between variables (hypothetical testing) with the investigation type of causal relationship and correlation between variables. The unit of analysis is rural banks in West Java, with 26 cities/regencies, and one of the rural banks with the largest assets and complete financial data were chosen. This study observed its financial performance sourced from Bank Indonesia and the Financial Services Authority (OJK), in the form of financial reports from each rural bank from 2010 to 2019, with consideration prior to the COVID-19 pandemic. The research findings resulted in a novelty, namely the “Model of Operational Efficiency (OER) and Profitability (NPM and NIM) of rural banks” which revealed that efforts to improve the performance of a healthy rural bank in West Java need to be supported by good management of productive assets and risk control.