What are the effects of Bad debts on Bank's profitability?

Bad Debts usually have a negative effect on a banks balance sheet and profitability. Bad Debt stands for loans that are granted to customers who would not repay them back. These are losses for the bank and hence all this money features as loss in the banks accounts which in turn reduces the banks profitability.

The effect of the bad debts is worse by rising energy and commodity prices which push up inflation in country.