THE EFFECT OF NON PERFORMING LOAN (NPL) AND LOAN TO DEPOSIT RATIO (LDR) ON RETURN ON ASSET (ROA)
Keywords:Non Performing Loans, Loan to Deposit Ratio and Return on Asset.
Banks are financial institutions whose main activity is to collect funds and
channel these funds back in the form of credit. The amount of third party
funds will make it easier for banks to distribute high credit. In addition to
the main activity of the bank, there is the main objective of the bank in
distributing these funds to obtain income in the form of loan interest from
the proceeds of credit distribution. If the credit is channeled well, it will
have a good effect on profitability. Conversely, if the credit is substandard
to default, it will reduce bank profitability. The purpose of this study was
to determine the extent to which Non Performing Loans and Loan to
Deposit Ratio affect Return on Assets. This research was conducted using
multiple linear regression analysis at state-owned banks, namely, Bank
BTN, Bank BRI, Bank BNI and Bank Mandiri for the 2010-2020 period.
The results of the research simultaneously show that Non Performing
Loans (NPL) and Loan to Deposit Ratio (LDR) on Return on Assets (ROA)
show significant results because the significance value is 0.00 <0.05 and
also partially there is a significant negative effect between Non
Performing Loan (NPL) to Return on Assets (ROA) with a significance of
0.00 <0.05 and there is a significant negative effect between Loan to
Deposit Ratio (LDR) on Return on Assets (ROA) with a significance value
of 0.00 <0.05.
Keywords : Non Performing Loans, Loan to Deposit Ratio and Return on