The Effect of Non-Performing Loans on Profitability in Banking Sector in Indonesia

DOI

10.2991/aebmr.k.200915.016How to use a DOI?

Keywords

capital adequacy ratio, gross domestic product, liquidity ratio, non-performing loans, bank size, profitability

Abstract

The objective of this study is to analyze the effect of non-performing loans on bank profitability. The dependent variable in this study is profitability and the independent variable is non-performing loans by using control variables are liquidity ratio, capital adequacy ratio, gross domestic product and size. This study uses 26 conventional banks that are listed on Indonesian Stock Exchange in the period between 2009-2017 by using purposive sampling. The results of this study show that non-performing loans variable has a significant negative influence on profitability bank. Liquidity ratio and gross domestic product have significant positive influence on profitability bank whereas capital adequacy ratio does not have significant influence on profitability bank. Implications: For conventional banking firms they are expected to do monitoring so that the level of non-performing loans is low, monitoring the level of liquidity ratio, are also contributing in increasing the growth of gross domestic product to increase profitability bank.

Copyright

© 2020, the Authors. Published by Atlantis Press.

Open Access

This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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TY  - CONF
AU  - Catur Rahayu Martiningtiyas
AU  - Dewi Tirtarini Nitinegeri
PY  - 2020
DA  - 2020/09/15
TI  - The Effect of Non-Performing Loans on Profitability in Banking Sector in Indonesia
BT  - Proceedings of the International Conference on Management, Accounting, and Economy (ICMAE 2020)
PB  - Atlantis Press
SP  - 64
EP  - 67
SN  - 2352-5428
UR  - https://doi.org/10.2991/aebmr.k.200915.016
DO  - 10.2991/aebmr.k.200915.016
ID  - Martiningtiyas2020
ER  -