THE DETERMINANTS PRICE TO BOOK VALUE IN BANKING COMPANIES LISTED ON THE INDONESIA STOCK EXCHANGED

Abstract

Background: Firm value reflects how the market views a company's performance, particularly in the banking
sector. This value is reflected through Price to Book Value (PBV)s, capital gains, and the Price to Book Value
(PBV) ratio, which is important to investors. Debt to Equity Ratio (DER) and Return on Assets (ROA)
influence PBV, along with sustainability practices such as Green Banking. Further research is needed on the
determinants of PBV due to inconsistent findings.
Purpose: This study aims to examine and analyze the effect of Green Banking, Debt to Equity Ratio (DER),
and Return on Assets (ROA) on Price to Book Value (PBV), in banking companies listed on the Indonesia
Stock Exchange (IDX).
Methodology: The type of research used is associative causal by using quantitative methods. The analytical
method used is multiple linear regression with the independent variables Green Banking, Debt to Equity Ratio
(DER) and Return on Assets (ROA) and the dependent variable is Price to Book Value (PBV). The data in this
study used secondary data taken from www.idx.co.id. The population in this study are banking companies
listed on the Indonesia Stock Exchange for the 2025 period.
Results: Green Banking does not directly affect Price to Book Value (PBV). The Debt to Equity Ratio
(DER) and Return on Assets (ROA) positively impact PBV. Together, Green Banking, DER, and ROA
influence PBV, enhancing investor confidence and increasing firm value through sustainability and financial
performance. The findings indicate that environmental performance disclosure alone does not impact market
perceptions of firm value. However, combining sustainability initiatives with strong financial metrics boosts
investor confidence and firm value.