INTRODUCTION

The financial sector is a sector that has a very large influence in supporting economic growth in a country (Baroroh, 2012). The financial sector provides support in terms of providing the funds needed for business development (Fitriasari, 2017). The financial sector can be in the form of banking institutions, namely banks and non-bank institutions such as pawnshops, savings and loan cooperatives, leasing companies, pension funds.

Banks have the function of collecting funds, channeling funds, and providing financial payment services (Wiwoho, 2014). As fund collectors, banks save money or provide places for safekeeping of money from the wider community in the form of checking accounts, savings accounts, time deposits (Werner, 2014). In its function as a channeling of funds, the bank will utilize the funds deposited by customers and distribute them to other customers who need credit loans. When serving as a financial payment service provider, the bank acts as an intermediary between customers or between customers and other parties, thereby facilitating payment transactions.

Banks in carrying out their activities have an important role in the financial system such as transfer of assets, transactions, liquidity and efficiency (Ichsan, 2014). The transfer of assets itself means that the bank transfers funds from the owner of the surplus funds to the borrower who has a deficit. In the transactional role, banks provide convenience to economic actors in conducting transactions.

The convenience provided by banks, both government and private banks is a form of bank service to customers (Salam, 2018). The main objective of bank operations is to earn profit, most of the bank's profit is derived from interest income which is the difference between loan interest income and customer deposit interest. Therefore, the income earned by the bank will have a positive effect on the amount of credit extended. The more credit extended by the bank, the more income the bank will receive. Most of the bank's income is obtained from interest generated from lending which is the backbone of the bank's income.

According to Law Number 7 of 1992 which was amended by RI Law Number 10 of 1998 concerning Banking, it is explained that credit is the provision of money or bills equivalent to that, based on a loan agreement or agreement between the bank and another party that requires the borrower to pay off the debt after a certain period of time with the provision of interest (Dyastuti, 2015). Interest income from credit is the main income for the bank. This situation makes banks try to increase lending to debtors, in order to increase their income. Meanwhile, another problem faced by bank management was when the Indonesian economy was deteriorating, which led to the emergence of non-performing loans and negative spreads between interest income and interest costs. Under these circumstances there will be many banks experiencing financial problems, so that banks can be liquidated because they are no longer able to fulfill the requirements as a healthy bank as determined by Bank Indonesia. Interest is important in fundraising activities and channeling funds to banks. Fundraising and lending will always be linked to interest rates. Interest for banks can be a cost (cost of funds) that must be paid to savers, but on the other hand interest can also be bank income received from debtors because of loans given (Rahmadhani & Mawardi, 2011).

To see how big the development of state-owned banks is in carrying out their business activities. From the results of the financial reports on the IDX, we can find out the performance of state-owned banks by knowing the progress of year on year (yoy) profit income. In the following, you can see a comparison of interest income, interest expenses and the level of profit earned during the 2012-2020 period at state-owned banks on the IDX. The following table shows a comparison of the variable component sizes for the 2012-2020 period:

Table 1

Bank Rakyat Indonesia (BRI)

No	Year Report	Interest Income (In million rupiah)	Burden Flower (In million rupiah)	Profit Clean (In million rupiah)
1	2012	48,772,021	12,599,060	18,687,380
2	2013	57,720,831	14,590,223	21,354,330
3	2014	73,065,777	22,684,979	24,226,845
4	2015	83,007,745	26,141,100	25,410,788
5	2016	92,151,312	26176,473	26,227,991
6	2017	100,080,250	28,652,214	29,044,334
7	2018	108,458,358	32,541,395	32,418,486
8	2019	118,379,729	40,048,971	34,400,000
9	2020	109,112,566	36,190,771	21,757,779

Source: State-Owned Bank Financial Statements on the IDX, and various sources on the official website of Bank BRI (www.bri.co.id)

Table 2

Bank Mandiri

No	Year Report	Interest Income (In million rupiah)	Burden Flower (In million rupiah)	Profit Clean (In million rupiah)
1	2012	42,550,442	15,019,850	16,043,618
2	2013	50,208,842	17,432,216	18,829,934
3	2014	62,637,942	23,505,518	20,654,783
4	2015	71,570,127	26,207,024	21,152,398
5	2016	71,145,401	22,484,799	14,653,163
6	2017	73,271,984	24,633,241	21,443,042
7	2018	74,454,382	23,710,628	25,851,937
8	2019	84,431,175	29,070,226	28,455,592
9	2020	80,093,037	28,222,605	17,645,624

Source: State-Owned Bank Financial Statements on the IDX, and various sources on Bank Mandiri's official website (www.mandiri.co.id)

Table 3

Bank Negara Indonesia (BNI)

NO	Year Report	Interest Income (In Million Rupiah)	Burden Flower (In Million Rupiah)	Profit Clean (In Million Rupiah)
1	2012	22,704,515	7,254,524	7,048,362
2	2013	26,450,708	7,392,427	9,057,941
3	2014	33,364,042	10,988,641	10,829,379
4	2015	36,895,081	11,334,885	9,140,531
5	2016	43,766,439	13,773,377	11,410,196
6	2017	45,003,201	15,272,144	17,222,663
7	2018	50,571,284	17,684,456	19,599,399
8	2019	54,495,996	20,939,501	19,486,623
9	2020	52,144,058	18,101,085	3,321,442

Source: State-Owned Bank Financial Statements on the IDX, and various sources on the official website of Bank BNI (www.bni.co.id)

Table 4

Bank Tabungan Negara (BTN)

NO	YEAR REPORT	INTEREST INCOME (In million rupiah)	BURDEN FLOWER (In million rupiah)	PROFIT CLEAN (In million rupiah)
1	2012	8,818,579	4,091,760	1,563,962
2	2013	10,782,877	5,129,554	1,563,161
3	2014	12,807,320	7,342,747	1,145,572
4	2015	14,966,209	8,155,133	1,850,907
5	2016	17,138,819	8,975,274	2,618,905
6	2017	18,446,732	9,885,116	3,027,466
7	2018	20,781,512	11,627,554	2,807,923
8	2019	23,271,432	15,167,294	209,263
9	2020	22,947,752	14,687,492	1,602,358

Source: State-Owned Bank Financial Statements on the IDX, and various sources on the official website of Bank BTN (www.btn.co.id)

Table 5

Previous Studies

No	Name/ Year	Title	Analysis Models	Research Results
1	(Heryana, 2010)	The effect of interest costs on interest income and the implications for liquidity at PT. West Java and Banten Banks	Descriptive statistical analysis was carried out using central tendency in the form of arithmetic average (mean) of interest cost, interest income and liquidity variables presented in the form of tables and graphs, in the implementation of the analysis	1. Interest costs at PT. Barrk West Java and Banten in the last four years have always experienced an increase. 2. Interest income from lending at PT. Bank Jabar and Banten in the last four years have always experienced an increase. interest income
2	(Pradopo, 2020)	Analysis of the effect of credit interest income and interest costs on third party funds net profit at bank ocbc nisp period 2012-2018	Using multiple regression analysis test, classic assumption test and partial correlation analysis	Based on the partial hypothesis test (t test), it can be seen that the independent variable, namely credit interest income (X1), has a partial effect Based on the partial hypothesis test (t test), it can be seen that the independent variable, namely the cost of interest on TPF (X2), has no partial effect and has a positive significant effect on the dependent variable, namely profit (Y).
3	(Mulyani, 2016)	The Effect of Interest Income on Profitability at PT. Bank Jabar Banten	Analysis of interest income and expense levels using the ROA, ROE, NPM and BOPO methods	Based on the results of testing the hypothesis that interest income has a positive effect on profitability at PT. Bank Jabar Banten.

This research was conducted with the following objectives; (a) to find out how the trend of financial performance is in terms of increasing income/profitability through interest income and interest expenses of state-owned banks (SOE) operating in Indonesia during 2012-2020, (b) to find out whether there is a strong correlation between income and interest expenses on the net profit earned by state-owned banks listed on the IDX during 2012-2020.

METHOD

This research was conducted by providing an analysis of historical data on the financial statements of banking companies listed on the Indonesia Stock Exchange. The aim is to see the level of net profit of banking service companies by using financial report data analysis.

Descriptive research is research that is intended to investigate the circumstances, conditions or other things that have been mentioned, the results of which are presented in the form of a research report (Arikunto, 2010). Descriptive research is research conducted to determine the value of each variable, both one variable or more are independent without making connections or comparisons with other variables (Sujarweni, 2015).

Based on the explanation stated in this study, this type of research is research with a quantitative descriptive method. Quantitative research methods can be interpreted as research methods based on the philosophy of positivism, used to examine certain populations or samples, sampling techniques are generally carried out randomly, data collection uses research instruments, data analysis is quantitative/ statistical in nature with the aim of testing hypotheses that are has been established research variables are divided into two namely:

1. Independent variables are independent variables whose existence is not influenced by other variables. This variable is the bank's net profit, which is obtained from the difference in deducting all income and expenses/costs. In this case it is defined as the variable Y

2. Dependent variable is a variable whose existence is influenced by other variables. This variable is interest income and interest expense in the current year which has been regressed. In this case it is defined as the variables X1 and X2.

Interest income and loan interest expenses are measured by the amount of interest income and interest expenses contained in the Profit/ Loss report.

Data collection technique

In this study, the technique used for data collection was a documentation study. Arikunto (2010) states that the documentation method is a method used to obtain data by investigating written objects such as books, journals, magazines, documents, diaries, and so on. This documentation data collection method is considered the most appropriate because this study aims to provide an assessment of the level of bank net profit through other processed data that has been published.

Based on data sources, this research data is classified as secondary data. Secondary data is data obtained indirectly from research subjects (Suliyanto, 2018). Secondary data has been collected and presented by other parties, both for commercial and non-commercial purposes. Secondary data can be in the form of statistical research results from survey report books, magazines/ newspapers, documentation and official archives.

In this study, secondary data was obtained from the bank's financial statements on the official website of the Indonesia Stock Exchange, namely www.idx.co.id , Bank's website Indonesia that is www.bi.go.id , as well as the websites of the concerned banks relevant sources with the required data as well as various literature sources which presumably can provide an overview of various technical matters regarding obtaining maximum net profit. With the data that will be collected, it is hoped that it will later provide maximum results and reduce data inaccuracies which will ultimately affect unexpected results (outputs) later.

Data Analysis Techniques

The data analysis method in this study is to use quantitative descriptive data analysis techniques. Quantitative analysis is done by analyzing a problem that is embodied in quantitative terms. The analytical tool used in this research is multiple regression analysis with the help of the Statistical Package for Social Sciences (SPSS). Multiple regressionis a regression or prediction model that involves more than one independent variable or predictor. The term multiple regression can also be referred to as multiple regression. The word multiple means plural or more than one variable.

RESULTS AND DISCUSSION

A. Results

After the data used is collected, the next step is to analyze and evaluate the data. Before being analyzed and evaluated, the data is first processed using the SPSS (Statistic Product and Service Solution) program, which then the output results will be evaluated to determine the variable interest income and interest expense on net income.

One-Sample Kolmogorov-Smirnov Test
a. Test distribution is Normal.

Table 8

Multicollinearity Test

Coefficientsa
Model		Unstandardized Coefficients		t	Sig.	Collinearity Statistics
Model		B	std. Error	t	Sig.	tolerance	VIF
1	(Constant)	1,060	1,569	.676	.504
	Interest income	.484	080	6,088	.000	.172	3,943
	Interest expense	-.045	.271	-2,382	.023	.172	3,943
a. Dependent Variable: Net Income

Source: SPSS Processing Results Version 16.0 (2021)

Run Test
a. Median

Table 10

Multiple Linear Regression

Coefficientsa
Model		Unstandardized Coefficients		t	Sig.	Collinearity Statistics
Model		B	std. Error	t	Sig.	tolerance	VIF
1	(Constant)	1,060	1,569	.676	.504
	Interest income	.484	080	6,088	.000	.172	3,943
	Interest expense	-.045	.271	-2,382	.023	.172	3,943
a. Dependent Variable: Net Income

Source: SPSS Processing Results Version 16.0 (2021)

Table 12

Partial Test

Coefficientsa
Model		Unstandardized Coefficients		t	Sig.	Collinearity Statistics
Model		B	std. Error	t	Sig.	tolerance	VIF
1	(Constant)	1,060	1,569	.676	.504
	Interest income	.484	080	6,088	.000	.172	3,943
	Interest expense	-.045	.271	-2,382	.023	.172	3,943
a. Dependent Variable: Net Income

Source: SPSS Processing Results Version 16.0 (2021)

From table 13 the coefficient of determination above, it can be seen that the Adjusted R Square value is 0.854. The result of this statistical calculation means that the ability of the independent variable to explain the variation in the changes in the dependent variable is 85.4%, while the remaining 14.6% (100% - 85.4%) is explained by other factors outside the analyzed regression model. Adjusted R Square value is 0.854, which means 85.4% of the influence of the independent variables on the dependent variable can be explained by the variables in this study and the rest is explained by other variables not examined such as company size, liquidity, cash and others.

B. Discussion

1. Effect of Interest Income on Net Income

Based on data analysis and hypothesis testing that has been carried out in this study, it can be seen that tcount (6.088) > ttable (2.034) and is significant 0.000 <0.05. This means that partially interest income has a significant effect on net income at state-owned banks listed on the Indonesia Stock Exchange. The success of a company can be measured by the level of net profit earned by the company itself because the main goal of the company in general is to obtain the maximum net profit and the achievement of net profit is a determining factor for the survival of the company itself. Net profit can be obtained optimally, if the operating income received also achieves maximum results. The effect of interest income on net income is if income exceeds expenses will get profit, otherwise if income
less than expenses will get a loss.

Increase net profit, must be accompanied by an increase in revenue. If interest income increases and is accompanied by an increase in net profit, the result is a very large profit for a company. This can be seen from the net profit earned by a company, which increases every year with changes in income. The results of this study are in accordance with the research (Mulyani, 2016; Pradopo, 2020; Ridwan, 2018) show that interest income has a significant effect on net income.

2. Effect of Interest Expense on Net Income

Based on data analysis and hypothesis testing that has been carried out in this study, it can be seen that t count (-2.382) > t table (2.034) and is significant 0.023 <0.05. This means that partially interest expense has a significant effect on net income at state-owned banks listed on the Indonesia Stock Exchange. The effect of interest expense on net income is that if banks can reduce costs, then banks will be able to increase net income. And vice versa, if there is a waste of costs (such as excessive use of office equipment) it will result in a decrease in net profit. The effect of interest expense on net income is in the calculation of profit and loss, the amount of this fee will reduce profits or increase bank losses. Interest expense has a negative effect on net income, meaning that the greater the interest expense incurred, the smaller the net profit obtained and vice versa the smaller the interest expense used, the greater the net profit obtained by the bank. The results of this study are in accordance with the research of (Heryana, 2010; Pradopo, 2020) indicating that interest expense has a significant effect on net income.

3. Effect of Interest Income and Interest Expense on Net Income

Based on data analysis and hypothesis testing that has been carried out in this study, it can be seen that F count is 103.149 > F table 3.28, with a significance of 0.000 < 0.05. This shows that all the independent variables are interest income and interest expense simultaneously has a significant effect on net income at state-owned banks listed on the Indonesia Stock Exchange. If interest income increases and is accompanied by an increase in net profit, the result is a very large profit for a company. This can be seen from the net profit earned by a company, which increases every year with changes in income. Interest expense has a negative effect on net income, meaning that the greater the interest expense incurred, the smaller the net profit obtained and vice versa, the smaller the interest expense used, the greater the net profit obtained by the bank.

The results of this study are in accordance with the research Rono (Mulyani, 2016; Pradopo, 2020; Ridwan, 2018) show that interest income and interest expenses have a significant effect on net income.

CONCLUSION

Based on the results of the data analysis that has been done, the conclusions that can be drawn from this study are as follows; (1) interest income partially has a significant effect on net income at state-owned banks listed on the Indonesia Stock Exchange, (2) interest expense partially has a significant effect on net income at state-owned banks listed on the Indonesia Stock Exchange, and (3) interest income and interest expenses simultaneously have a significant effect on net income at state-owned banks listed on the Indonesia Stock Exchange.

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One-Sample Kolmogorov-Smirnov Test
		Unstandardized Residuals
N		36
Normal Parameters	Means	.0000000
Normal Parameters	std. Deviation	3.78936795E6
Most Extreme Differences	absolute	.139
	Positive	072
	Negative	-.139
Kolmogorov-Smirnov Z		.831
asymp. Sig. (2-tailed)		.494
a. Test distribution is Normal.

Run Test
	Unstandardized Residuals
Value test	-2.41728E5
Cases < Test Value	18
Cases >= Test Value	18
Total Cases	36
Number of Runs	21
Z	.507
asymp. Sig. (2-tailed)	.612
a. Median

ANOVA b
Model		Sum of Squares	df	MeanSquare	F	Sig.
1	Regression	3.142	2	1,571	103,149	.000a
	residual	5026	33	1,523
	Total	3,644	35
a. Predictors: (Constant), Interest Expense, Interest Income
b. Dependent Variable: Net Income

Summary modelb
Model	R	R Square	Adjusted R Square	std. Error of the Estimate
Model	R	R Square	Adjusted R Square	std. Error of the Estimate
1	.928a	.862	.854	3.90251E6
a. Predictors: (Constant), Interest Expense, Interest Income
b. Dependent Variable: Net Income

Descriptive Statistics
	N	Minimum	Maximum	Means	std. Deviation
Interest income	36	8,818,579	118,379,729	5.3235	3.09809
Interest expense	36	4,091,760	40,048,971	4.3728	3.93728
Net profit	36	209,263	34,400,000	1.5049	1.02042
Valid N (listwise)	36