International Journal of Research in Social Sciences
  • Year: 2014
  • Volume: 4
  • Issue: 1

Do non performing loan affect bank performance? evidence from listed banks at Karachi stock exchange (KSE) of Pakistan

  • Author:
  • Arfan Ali, Hazoor Muhammad Sabir, Muhammad Sajid1,, Muhammad Taqi
  • Total Page Count: 15
  • Page Number: 363 to 377

*Department of Banking and Finance, Government College University, Faisalabad, Pakistan

**Chairman, Business Administration, Government College University, Faisalabad, Pakistan

***Lecturer, Department of Banking and Finance, Government College University, Faisalabad, Pakistan

1Corresponding Author

Online published on 1 February, 2014.

Abstract

The objective of this paper is to examine the relationship between the Non-performing loans and efficiency of the Banks in the Pakistan under the period of 5 years (2006–2011). To investigate the objective of this study Regression model is used. NPL to gross advances shows the percentage of Nonperforming loan as compare to gross advances that a bank given. The results show of this study that the provisions negatively affect on the financial performance of the bank through reduction in loan interest income, profits and lending funds. It is also investigated that on performing loan has significant impact on the efficiency of banks. It has inverse effect on the performance of banks.

Keywords

ROA, ROE, EPS, Non-performing loans