Economics, Econometrics and Finance
6 months ago

Non-Performing Loans reduce bank profits more than interest rate fluctuations on Return on Assets.

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Jurnal Ekonomi Bisnis Dan Industri (EBI)
THE IMPACT OF NON-PERFORMING LOANS AND THE BI RATE ON RETURN ON ASSETS
Faizal Rizky Yuttama

Paper Summary

The study looked at how bad loans and interest rates affect a bank's profits. They used data from state-owned banks in Indonesia from 2020 to 2022. The researchers found that having more bad loans hurts a bank's profits, while changes in interest rates don't have a big impact.

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