(4th International Conference for Accounting Researchers and Educators, Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2018) Kumudumali, H.H.E.; Wijesinghe, K.D.G.N.
Financial Institutions are exposed to different types of risks, which effect the
performance and activity of these financial institutions. Credit risk is one of the most
significant risks that financial institutions face, considering that granting credit is one
of the main sources of income in financial institutions.
The main purpose of this study is to investigate the impact of credit risk management
on financial performance in finance institutions. The study considered ROA (Return
on Asset) as profitability indicator while Non- Performing Loan Ratio (NPLR), Total
Loans to the Asset ratio, Capital Adequacy Ratio (CAR) are considered as credit risk
management indicators. The study used secondary data of 30 financial institutions
covering the period of 2012 to 2017. Data were analyzed using panel data analysis
through E-Views packages. The result reveals that overall credit risk has significant
impact on profitability of listed financial institutions
