THE EFFECT OF COMPANY SIZE AND SALES GROWTH ON THE PROFITABILITY OF RURAL BANKS IN EAST NUSA TENGGARA (NTT)

Abstract

This research is motivated by the important role of Rural BPR in supporting financial inclusion and economic growth, especially in rural and urban areas that are not reached by large commercial banks. This study aims to analyze the effect of company size and sales growth on the profitability of BPRs in East Nusa Tenggara (NTT) registered with OJK for the 2017-2021 period. This type of research is associative research with multiple linear regression analysis methods. Data is taken from the BPR's semi-annual financial statements during the period. The population of this study was BPR in NTT, with a sample selected using purposive sampling method, consisting of 10 BPRs that met the criteria. The analytical tool used is multiple linear regression which is tested with the classical assumption test, t test, and f test using SPSS software. The results showed that company size has a negative and significant effect on BPR profitability, while sales growth has no significant effect. Simultaneously, firm size and sales growth have a significant effect on profitability. These findings indicate that BPR management needs to optimize operational efficiency and risk management to increase profitability, without focusing too much on increasing sales alone.