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4 CONCLUSIONS
The research shown that credit risk management and
NPL has significant influence on profitability, both
contributes 53,9 % influence on profitability.
Therefor bank management need to implement a
sound and effective credit risk management in order
to improve bank’s performance, to be able to protect
investor interest and the most important one is to
prevent the banking crisis, which will have a
pervasive impact.
Bank need to be equipped with comprehensive
credit risk management which allow management to
identify, measure, supervise and control the credit
risk.
We found that credit risk management has a
negative significant influence on non-performing
loan. Applying a sound credit risk management is a
must for banking industry, as it will decrease the non-
performing loan.
This study also show that nonperforming loan has
a negative significant influence on profitability. It
means that the increased in nonperforming loan, due
the poor bank credit quality, will resulted in a loss
from bank’s operational activity.
The research shown that credit risk management
has a positive, significant influence on profitability.
An effective credit risk management will support the
achievement of bank profit, thus will increase its
profitability.
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