DETERMINATIONS OF INDONESIA BANK NON-PERFORMING LOAN

Abstract

The purpose of this research is to analyze the determinations of non-performing loan for a sample of 15 Indonesia banks for the period of 2012-2016. Indonesia has a lot of commercial banks, problem loan and profitability of bank is crucial to financial environment. The variables used are macroeconomic variables and specific variables to the bank. The macroeconomic variables included are the rate of growth of GDP, unemployment rate with respect to specific variables opted for the return on assets, the change in loans and the loan loss reserves to total loans ratio (LLR/TL). Thought of the method of panel data, we found the problem loans vary negatively with the growth rate of GDP, the profitability of banks’ assets,unemployment rate and positively with the loan loss reserves to total loans.