The study is aimed to analyzing the impact and causes of non-performing loans and financial crisis on the banking industry evidence from all listed bank of London stock exchange (UK) during the period of the 2001 to 2015 .To measure the impact of non-performing loans as well as to check the impact of financial crisis on the banking sector of the UK banks performance, OLS model, Robust test, hauseman test, to check the Hetrocidasticity through Breusch pagan and Jarque bera test on pool regression model and multi-colinearity utilized through the variables ROA, ROE,FC,NPL for the analysis of pre and post financial crisis and non-performing loans impact on the performance of the banking sector. The author also reviewed the research on the relationship between non-performing loans and financial crisis with the same test utilization. She argued that non-performing loans and financial crisis both are harmful for the banking industry but the financial crisis pre and post impact show the result clearly were badly effected most the banks other than two or three and due to non-performing loans banks become privatized because of bad performance. Key Words: ROA (Return on Assets), ROE (Return on Equity), T-test, Robust, Hauseman, NPL (Non-Performing Loans) FC (Financial Crisis), OLS (Ordinary Least Square).