Studi ini bertujuan melakukan pengujian pengaruh loan portfolio diversification terhadap bank stability dengan moderasi variabel market concentration pada bank BUKU III dan BUKU IV yang terdaftar di BEI. Digunakan data berupa Audited Annual Review bank umum pada periode tahun 2013 hingga tahun 2019. Digunakan metode analisis regresi data panel, dengan bank stability menggunakan pengukuran Z-Score, loan portfolio diversification indeks Herfindahl-Hirschman (HHI) dan market concentration menggunakan indeks Herfindahl-Hirschman (HHI) dan Concentration Ratio (CR). Hasil penelitian menunjukkan bahwa loan portfolio diversification yang dilakukan bank memiliki pengaruh positif dan signifikan terhadap bank stability namun market concentration tidak berpengaruh signifikan terhadap stabilitas bank. Penelitian ini juga mencatat bahwa market concentration berpengaruh signifikan dalam memoderasi pengaruh loan portofolio diversification terhadap bank stability. Keterbatasan penelitian dapat dikembangkan pada penelitian selanjutnya dengan melakukan penelitian tentang loan portfolio diversification terhadap skala usaha (besar, menengah dan kecil) yang mempunyai risiko yang berbeda terhadap kestabilan bank. Kontribusi penelitian ini ditujukan bagi sektor perbankan dan regulator perbankan, dan dapat mewaspadai pemberian alokasi kredit yang tidak berimbang pada satu sektor tertentu dapat mengganggu stabilitas bank dan tentu saja stabilitas perekonomian suatu negara terutama yang sistem keuangannya dinominasi sektor perbankan.

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This study aims to examine the effect of loan portfolio diversification on bank stability by moderating the market concentration variable in Bank BUKU III and IV listed on the Indonesia Stock Exchange. The data used were commercial bank audited financial report data for the study period 2013 to 2019. We used panel data regression analysis with the measurement of banking stability using Z-score and loan portfolio diversification using the Herfindahl-Hirschman (HHI) index and market concentration using the Herfindahl-Hirschman (HHI) index and the Concentration Ratio (CR). The results revealed that the loan portfolio diversification carried out by banks had a significant effect on bank stability, but market concentration did not have a significant effect on bank stability. We noted that market concentration had a significant effect in moderating the effect of loan portfolio diversification on bank stability. Research limitations can be developed in further research by conducting research on loan portfolio diversification to business scales (large, medium and small) which have different risks to bank stability. The contribution of this research is aimed at the banking sector and banking regulators, and meant to pay attention to the provision of unbalanced credit allocations in one particular sector that can disrupt bank stability and obviously the economic stability of a country, especially where the financial system is dominated by the banking sector.