Credit risk management and profitability of lending institutions in Panabo City

Abstract

This study aims to determine the relationship between credit risk management and the profitability of lending institutions in Panabo City. This study used a quantitative descriptive correlational research method to know the relationship between the two variables by sampling fourty-six lending institutions in Panabo City. The study administered research questionnaires of both variables, which were interpreted using weighted mean and Pearson-r statistical tool. The level of credit risk management of lending institutions with an indicator of credit risk identification, control, assessment, and mitigation has gathered an overall mean of 4.86, with the descriptive equivalent of very high, while the level of profitability of lending institutions with an indicator return on asset and return of equity with an over-all mean of 4.91 which both has a descriptive equivalent of very high. Therefore, the finding shows that there is a significant relationship between credit risk management and the profitability of lending institutions in Panabo City.