The Effect of Non-Performing Loans and Loan to Deposit Ratio on Profitability

Abstract

This study analyzes the effect of non-performing loans and loan-to-deposit ratios on profitability. The research method used is quantitative, namely by taking secondary data from annual financial reports available on the Indonesia Stock Exchange for 2018-2020. The object of the study is banking companies. The research was tested using SPSS. The results of the partial test (t-test) indicate that the variable Non-Performing Loan (X1) has a significant effect on audit delay with a significance value of 0.036 < 0.05. The variable Loan to Deposit Ratio (X2) significantly negatively affects profitability, with a significance value of 0.008 < 0.05. Meanwhile, the simultaneous test (F-test) results show that the significance of the variables Non-Performing Loan (X1) and Loan to Deposit Ratio (X2) simultaneously have a significant effect on profitability (Y) with a significance level of 0.000 < 0.05.