The Dynamics of Non-Performing Loan and Liquidity in Driving Bank Profit Growth
Article Sidebar
Main Article Content
Abstract
Profit growth is one of the key indicators used to assess the financial performance and sustainability of banking institutions. Maintaining stable profit growth requires effective credit risk and liquidity management, which are commonly measured by Non-Performing Loan (NPL) and Loan to Deposit Ratio (LDR). However, previous studies have reported inconsistent findings regarding the influence of these variables on profit growth. Therefore, this study aims to examine the effect of NPL and LDR on the profit growth of banking companies listed on the Indonesia Stock Exchange (IDX). This research employed a quantitative approach using secondary data obtained from the annual financial statements of 32 banking companies during the 2021–2025 period, resulting in 160 firm-year observations. The sample was selected using a purposive sampling technique, while the data were analyzed using multiple linear regression with IBM SPSS Statistics version 26. The results indicate that NPL has a negative relationship with profit growth, whereas LDR has a positive relationship. However, both variables do not have a significant effect on profit growth either individually or simultaneously. Furthermore, the explanatory power of the model is relatively low, indicating that profit growth is influenced by other financial and macroeconomic factors beyond NPL and LDR. These findings suggest that maintaining credit quality and liquidity remains important, but banking management should also strengthen operational efficiency, capital management, and other financial strategies to achieve sustainable profit growth.
Article Details
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
References
[1] E. L. Arnedy and S. Noviyana, “The Influence of CAR, NIM, ROE, LDR and NPL on Profit Growth at PT. Bank Negara Indonesia Tbk Period 2018–2022,” BISMAKU Bisnis Manaj. dan Keuang., vol. 1, no. 2, pp. 91–100, 2024, doi: https://doi.org/10.35760/bismaku.2024.v1i2.12426.
[2] K. Anwar, P. Pardosi, T. Sulistyowati, F. de Jesus Maia, and E. Setiawan, “The Influence Of Ldr And Npl On The Profitability Of Rural Banks: A Systematic Literature Review (2021–2025),” Ekon. Sharia J. Pemikir. dan Pengemb. Ekon. Syariah, vol. 11, no. 1, pp. 73–108, 2025, doi: https://doi.org/10.36908/esha.v11i1.1566.
[3] A. K. Suradireja and B. Rikumahu, “Analysis The Influence Of Non Performing Loan, Loan To Deposit Ratio, Independent Commissioner Proportion, Net Interest Margin And Capital Adequacy Ratio Towards Profit Growth Of Bank J Trust Indonesia In 2009-2014 Based On Risk-based Bank Rating Approach,” eProceedings Manag., vol. 3, no. 1, pp. 414–421, 2016, [Online]. Available: https://openlibrarypublications.telkomuniversity.ac.id/index.php/management/article/view/3065
[4] A. A. S. Fatimah and N. A. Rahmah, “Pengaruh Nim, Oer, Ldr Dan Npl Terhadap Pertumbuhan Laba,” J. Compr. Sci., vol. 1, no. 3, pp. 419–438, 2022, doi: https://doi.org/10.59188/jcs.v1i3.66.
[5] I. Setiawan and I. M. Dana, “The Effect of LDR, NPL, and NIM on Profitability in Conventional Commercial Banks on IDX,” Int. J. Asian Bus. Manag., vol. 3, no. 4, pp. 541–556, 2024, doi: https://doi.org/10.55927/ijabm.v3i4.10151.
[6] H. Y. Prihatinto and P. B. Setiadi, “Pengaruh Loan to Deposit Ratio (LDR) dan Non Performing Loan (NPL) Terhadap Profitabilitas pada Bank Perkreditan Rakyat (BPR) di Kabupaten Sidoarjo, Jawa Timur Tahun 2019-2021,” Cakrawala Repos. IMWI, vol. 6, no. 2, pp. 934–941, 2023, doi: https://doi.org/10.52851/cakrawala.v6i2.281.
[7] W. Sakdiyah, I. Wahyuni, and T. D. Pramitasari, “Pengaruh Non Performing Loan (NPL) dan Loan to Deposit Ratio (LDR) Terhadap Nilai Perusahaan melalui Profitabilitas pada Perbankan yang Terdaftar di Bursa Efek Indonesia (BEI) Periode 2019-2021,” J. Mhs. Entrep., vol. 2, no. 5, pp. 996–1010, 2025, doi: https://doi.org/10.36841/jme.v2i5.3526.
[8] A. Kubertein, I. Christian, J. Susanto, and M. I. Diarsyad, “Pengaruh Operational Efficiency (BOPO), Loan to Deposit Ratio (LDR), dan Non-Performing Loan (NPL) terhadap Profitabilitas Perusahaan Sektor Perbankan yang Terdaftar di Bursa Efek Indonesia Periode 2020–2023,” J. Soc. Econ. Res., vol. 7, no. 2, pp. 749–757, 2025, doi: https://doi.org/10.54783/jser.v7i2.1112.
[9] A. P. Ashari, Z. Z. Simon, A. H. Nasution, A. S. Zusryn, and M. Asaari, “An An Investigation of Profit Growth in Indonesian Banking Before and During Pandemic Covid-19: Does Financial Performance Matter?,” Res. Bus. Manag., vol. 3, no. 2, pp. 73–84, Aug. 2025, doi: 10.58777/rbm.v3i2.296.
[10] Rini and B. Siagian, “Bank Profitability Determinants on Bank Specifications and Macroeconomics Moderated with Market Concentration: Bank KBMI 3 and 4 (2020-2024),” East Asian J. Multidiscip. Res., vol. 4, no. 10, pp. 5025–5044, 2025, doi: https://doi.org/10.55927/eajmr.v4i10.423.
[11] G. Boyreau-Debray, “Financial Intermediation and Growth : Chinese Style,” The World Bank, 3027, 2003. doi: https://doi.org/10.1596/1813-9450-3027.
[12] I. D. Czechowska, C. Lipiński, J. Stawska, J. Stępińska, W. Zatoń, and M. Borys, Kredyty zagrożone NPL oraz odpisy na straty kredytowe w sektorze bankowym. Wydawnictwo Uniwersytetu Łódzkiego, 2024. doi: https://doi.org/10.18778/8331-414-3.
[13] S. Bell and H. Feng, Banking on growth models: China’s troubled pursuit of financial reform and economic rebalancing. Ithaca, NY: Cornell University Press, 2022. doi: https://doi.org/10.1515/9781501762536.