THE CORRELATION BETWEEN SYNDICATED AND LOAN TO DEPOSIT RATIO (LDR) TO NON PERFORMING LOAN (NPL) (CASE STUDY OF PT. BANK X) DURING 2002-2009)

Abstract

This research is aimed to examine whether or not Syndicated Loan and Loan to Deposit Ratio (LDR) affect the probability of increasing Non Performing Loan (NPL) in Indonesia for period 2002-2009. The level of Non Performing Loan indicates the relationship to bank performance efficiency, the higher the Non Performing Loan of a bank, the more inefficiency they performed. Central Bank of Indonesia pushes bank to decrease the level of Non Performing Loan under 5%. On the other hand, Central Bank of Indonesia increasing the level of Loan to Deposit ratio for banks. Loan to Deposit Ratio reflects either Increasing in Loan or Decreasing in Deposit. Banks do many ways to fulfill their high Loan to Deposit Ratio, one of the ways is with Loan Syndication where 2 or more banks syndicate to lend money for their lender. The selected variable is used to see whether Non Performing Loan is influenced by those variables or not. The type of sampling used was a pooled data, which combines data from cross section and time series. Here, the researcher used the data from PT Bank X as a sample, with the consideration that PT Bank X is one of the big state owned bank in Indonesia, which experiences from many years. All these hypothesis testing were using multiple regression model with the main suppose of SPSS Statistic software to be able to generate objective results. This research results shows that syndicated loan and Loan to Deposit ratio simultaneously have influence the Non Performing Loan of PT Bank X in Indonesia during period 2002-2009 with negative correlation.