J URNAL P ENELITIAN Volume 19 Issue 2, December 2022 │ pp.127-135 Journal homepage: https://jurnal.unmer.ac.id/index.php/jp The effect of income on net profit of banks before and during the Covid-19 pandemic Anjelina Lamablawa, Eko Yuni Prihantono*, Dimas Eka Pratama Department of Diploma in Banking and Finance, University of Merdeka Malang Jl. Terusan Raya Dieng No. 62-64 Malang, 65146, Indonesia *Corresponding Author: E-mail: eko.prihantono@unmer.ac.id Abstract During the Covid-19 pandemic, the banking sector experienced a decline in performance in terms of funding and lending. This downturn had significant implications on the income and net profit of banks, leading to operational challenges. This study aims to examine the effect of income on net profit before and during Covid- 19 in State-Owned Banks (SOBs) in Indonesia. We included all existing SOBs in Indonesia, totalling 64 firms-quarterly observations during the period from 2018 to 2021. The research methodology involved regression analysis and a comparative study using Paired Sample Test. Our findings indicate that income has a significant impact on net profit. Furthermore, we demonstrate that there was no difference in bank income before and during the Covid-19 pandemic. However, there were variations in the net profit obtained by the banks. This phenomenon can be attributed to decreased interest margins as banks had to lower the interest rates on deposits without reducing the interest rates on loans. Keywords: Covid-19; Income; Net profit; State-Owned Banks ©2022 Jurnal Penelitian This is an open access article distributed under the CC BY-SA 4.0 license (https://creativecommons.org/licenses/by-sa/4.0/) How to cite: Lamablawa, A., Prihantono, E. Y., & Pratama, D. E. (2022). The effect of income on net profit of banks before and during the Covid-19 pandemic. Jurnal Penelitian, 19(2), 127-135. https://10.26905/jp.v19i2.9303 1. Introduction The banking sector plays a pivotal role in advancing the economic well- being of society. Its function of aggregating funds from individuals with surplus capital and channeling them towards those in need stimulates productive utilization of societal funds, yielding goods and services. Banking businesses represent a dynamic subset of financial institutions that have witnessed rapid evolution. However, in early 2020, specifically in March, the global community, including Indonesia, faced the unprecedented phenomenon of the Covid-19 pandemic. The rapid proliferation of Covid-19 in Indonesia, coupled with escalating fatality rates, triggered multifaceted impacts spanning both public health and the global economy. As an integral component of the economic framework, the banking sector was not immune to its reverberations. Indonesia's initial perception that the Covid-19 virus would have a limited presence due to its Article Info: Received: 2022-09-12 Revised: 2022-10-25 Accepted: 2022-12-02 Published: 2022-12-31 E-ISSN: 2809-7688 P-ISSN: 1410-7295