Bank risk and non-interest income activities in the Indonesian banking industry

► The recent trend of product diversification in the Indonesian banking industry underscores the importance of non-interest income activities. ► This study examines the relationship between product diversification and bank risk in Indonesia. ► The degree of product diversification is negatively associated with bank risk for small-sized banks, while it is positively related to bank risk for large-sized banks. ► Deregulation encouraging banks to become more involved in product diversification may have an adverse effect on the overall banking system, where large-sized banks are playing a significant role in Indonesia.