MODERATING IMPACT OF FINANCIAL RATIOS AND NON-PERFORMING LOANS ON THE PROFITABILITY OF AFRICAN DEVELOPMENT BANK

Development banks are crucial financial intermediaries of any developing nation by supporting its economic and social development, providing financing and support for such development. Thus, it must maintain its profitability and financial health. However, non-performing loans and financial ratios are crucial determinants affecting banks' components. Therefore, this study intends to analyse the aftermath of Non-performing loans (NPLs) and financial ratios on the profitability of the Development Bank of Africa. For this purpose, the data from eight years, from 2014 to 2021, have been considered and analysed using time series regression. The findings reveal the significant impact of NPLs and solvency ratio and the insignificant impact of shareholders' equity ratio on the bank's profitability, represented by return on assets. It is recommended to keep a check on NPLs and take steps to mitigate in various ways discussed and improve profitability so that efforts towards economic development would not be adversely affected.