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Non-Performing Loan And Asset Utilization Of Banks: Evidence From Bangladesh


  • Mohammad Ziaul Islam

    (Leading University, Bangladesh)

  • Shormin Aktar

    (Leading University, Bangladesh)

  • Mohammad Awal Hossen

    (Jessore University of Science and Technology, Bangladesh)

  • Mohammad Mohammad Saiful Islam

    (Leading University, Bangladesh)


The purpose of the research paper is to investigate the impact of non-performing loan (NPL) on return on asset (ROA) of banks in a least developed country as Bangladesh. The research employs a sample size of 40 consisting of the data of non-performing loan ratio against return on asset ratio for last 10 years (2008-2017) generated from four categories of banks namely- State Owned Commercial Banks (SCBs), Specialized Banks (SBs), Private Commercial Banks (PCBs) and Foreign Commercial Banks FCBs). The paper provides empirical evidence that non-performing loan has significant impact on return on asset of Bank. This study will help the policy makers to maintain desired level of NPL ratio for ensuring ROA targeted by the bank. This research seems to be the first attempt to address such an issue in the context of Bangladesh because most of the literature shows impact of NPL on profitability only ignoring the issue of asset utilization of banks.

Suggested Citation

  • Mohammad Ziaul Islam & Shormin Aktar & Mohammad Awal Hossen & Mohammad Mohammad Saiful Islam, 2018. "Non-Performing Loan And Asset Utilization Of Banks: Evidence From Bangladesh," Romanian Economic Business Review, Romanian-American University, vol. 13(4), pages 31-39, december.
  • Handle: RePEc:rau:journl:v:13:y:2018:i:4:p:31-39

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    References listed on IDEAS

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    1. Changjun Zheng & Probir Kumar Bhowmik & Niluthpaul Sarker, 2019. "Industry-Specific and Macroeconomic Determinants of Non-Performing Loans: A Comparative Analysis of ARDL and VECM," Sustainability, MDPI, vol. 12(1), pages 1-17, December.

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