Abstract - This study is to examine the effect of pro-growth absorptive strategy and innovation performance, and how innovation performance mediates the effect. The data sources were primary and secondary data obtained from the questionnaire and the Financial Services Authority (Otoritas Jasa Keuangan/OJK) of Indonesia in 2019 related to 57 commercial banks under study. Component-based Partial Least Square (PLS) was used to analyze obtained data through two stages of evaluation model (outer and inner) to test the causal relationship among variables. We found that the pro-growth absorptive strategy has a positive and significant effect on innovation performance and business performance. Innovation performance has a positive and significant effect on business performance. Innovation performance mediates the effect of pro-growth absorptive strategy on business performance, but it is the partial mediating. The main implication of the study is that to maintain and improve business performance, the banks first have to focus on pro-growth absorptive strategy to initiate the implementation of innovation performance.