Due to the uncertainty of global financial market is increasing and the effect of Quantitative Easing, the competition between banks in Taiwan is worsening and lead to the rise of non-performing loan ratio. Generally, non-performing loan ratio is long been considered as an important indicator of bank’s quality of loans, and the quality of bank’s loans can reflect its operational performance. Therefore, the purpose of this study is to understand the relationship between bank’s non-performing loan ratio and operational performance. This study collected a 9 years (during the 2005-2013 period) longitudinal data from 27 Taiwanese banks to test my hypotheses. The results show that bank’s non-performing loan ratio have significantly negative effect on bank’s operational performance. Specifically, the result of present study indicate that bank’s non-performing loan ratio have significantly negative effect on bank’s ROE, ROA, net operating profit before tax, and net employee profit before tax.