Abstract
Non-Performing Loan (NPL) has been crucial factor these days in
terms of Banking sector sustainability and profitability. This paper
intends to assess factors that may influence the rising level of
nonperforming loans in commercial banks of Pakistan. The study uses
Size, Return on Assets, Earning per Share, Cash to Total Asset, and
investment to Total Asset, Capital Adequacy Ratio and Breakup value
per share as determinants of nonperforming loans as banks internal
factors. Panel data from 2006-2016 was taken from published annual
reports and State Bank of Pakistan data base. Descriptive Statistics,
correlation analysis and random effect panel least square regression
was used to analyze data through STATA application software. The
analysis leads to the conclusion that reduced level of nonperforming
loans leads to increased banks performance. It was also concluded that
Return on Asset, Earning per share, Capital adequacy ratio and
Breakup value per share has got a significant impact on nonperforming loans.
Ihtesham Khan, Adnan Ahmad. (2017) Assessing Banks Internal Factors as Determinants of NonPerforming Loans: Evidence from Pakistani Commercial Banks, Journal of Managerial Sciences, Volume 11, Issue 1.
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