CSR Spending, Non-Interest Income, and Financial Performance of Commercial Banks: Evidence from Bank-Year Observations

This study investigates how CSR, non-interest income, and capital strength affect the financial performance of commercial banks. Profitability is measured by return on assets (ROA) using a balanced bank-year dataset of 100 observations. SPSS is used for descriptive statistics, Pearson correlation, multiple linear regression, and diagnostics for collinearity and residuals. The regression model is statistically significant (R = 0.688, R² = 0.474, adjusted R² = 0.457, F = 28.828, p < 0.001). Non-interest income has a positive and statistically significant effect on ROA (B = 0.008, β = 0.303, p < 0.001), while capital strength has the strongest positive effect (B = 0.254, β = 0.646, p < 0.001). The relationship between CSR spending and profitability is positive but not statistically significant (B = 1.548, β = 0.101, p = 0.178), and it is not included as a direct driver of profitability in this model. The results indicate that the two factors with the greatest immediate effect on bank profitability are revenue diversification and an appropriate level of capitalisation. Meanwhile, CSR can contribute to long-term value through reputation, stakeholder trust, green banking, and financial inclusion. The study contributes by integrating the concepts of CSR, non-interest income, and capital strength into a single model for calculating bank profitability in an emerging banking market.