As financial intermediaries, banks play an important role in the operation of an economy.

Banks are the financial system's main source of currency; therefore, their stability is vital. As
a result, understanding the elements that contribute to their success is crucial to the economy's
stability. The economy serves as a catalyst for growth and development. Banks primarily
contribute to commercial banks' financial success by establishing profitability, and sales, and
promoting company development through loan portfolio management concepts such as interest
rates, loan payback schedules, loan size, and risk assessment. (Keown, 2002).

Conceptual Framework Establishing the Relationship between loan portfolio

management and financial performance Keown, (2002).

Independent variable Dependent variable

Loan Portfolio management Financial Performance

• Interest rate
• Profitability of the firm
• Loan repayment schedule
• Loan size and its structure • Sales volume of the firm
• Risk assessment • Business expansion
• Liquidity

Moderating variables
• Inflation
• Level of income
• Level of economic growth
• Principles and procedures
for lending

Keown, (2002)