Abstract
This study aims to determine whether there is an effect of Non Performing Loans and Loan To Deposit Ratio on Return On Assets partially or simultaneously. The method used in this research is descriptive verification method with a quantitative approach which is sourced from the annual financial statements of state-owned banks and private banks and literature studies. The sampling technique was using purposive sampling technique. The data used are secondary data analyzed through descriptive analysis and verification of the validity of multiple linear regression test data and hypotheses using the T test and F test coefficient of determination. This study uses the SPSS version 22 software program to process data. The results of this study indicate that partially non-performing loans have a significant negative effect on Return on Assets and the Loan to Deposit ratio has no effect on Return on Assets. Meanwhile, simultaneously the Non Performing Loan and the Loan To Deposit Ratio simultaneously have a significant effect on Return On Assets.
Highlights
In the current era of globalization, it is the most important role of financial institutions, namely banks
T table
The results of this study indicate that the increase in Non-Performing Loans (NPL) means that the bank has a loss, this is due to the increase in non-performing loans owned by the bank, so it can have a negative impact on the bank and the Return on Assets decreases due to the profit or profit it has. companies are used to cover problem loans faced by the Bank
Summary
In the current era of globalization, it is the most important role of financial institutions, namely banks. In today's global era, the banking industry is one of the fastest growing industries. In Indonesia, through its official account, it can be seen that the growth of loans extended by banks reached 11.7% (year on year), higher than the realization of credit growth in the previous year of 8.2% (year on year). The banking sector has faced various problems, one of which is Bank Indonesia raising interest rates. The increase in interest rates will affect the banking business and affect economic growth. Economic growth greatly affects demand for credit
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