scholarly journals Determinants of Loan Quality: Lessons from Greek Cooperative Banks

2016 ◽  
Vol 9 (1) ◽  
pp. 115-140
Author(s):  
Vasiliki Makri ◽  
Konstantinos Papadatos
Keyword(s):  
Credit Risk ◽  
Public Debt ◽  
Economic Activity ◽  
Loan Loss ◽  
Explanatory Variables ◽  
Regression Techniques ◽  
Cooperative Banks ◽  
Loan Quality ◽  
Accounting Ratios ◽  
Macroeconomic Environment

AbstractThe article focuses on the credit risk of cooperative banks in Greece. The main objective is to define which factors are responsible for variations in loan quality during the period 2003-2014. Loan quality is measured by Loan Loss Reserves Ratio (LLR) and dynamic regression techniques are implemented for the econometric estimations. The outlined results suggest that the macroeconomic environment (i.e. public debt, local unemployment, economic activity and inflation) and the accounting ratios (i.e. past loan quality and profitability) seem to be the explanatory variables of problem loans.

scholarly journals Stress Testing of Retail and Corporate Segments of Russian Credit Market

2015 ◽  
Vol 1 (10) ◽  
pp. 7-19
Author(s):  
Alexander M. Karminsky ◽  
Oleg S. Kozlov
Keyword(s):  
Credit Risk ◽  
Retail Sector ◽  
Loan Loss ◽  
Macroeconomic Shocks ◽  
Average Value ◽  
Considerable Impact ◽  
Loan Quality ◽  
Loan Defaults ◽  
Corporate Loan ◽  
Loan Growth

The objective of the paper is to investigate and compare risk patterns in retail and corporate segments and assess the potential impact of macroeconomic shocks on loan quality. Banks’ monthly financial statements data for the period 2004 – 2012 are used. Firstly, we develop an indicator to measure institution’s credit risk that reflects variance and average value of NPL corrected for loan loss reserves. It is used to compare the risk-return patterns of largest state-owned banks, and under our framework we identify how the strategies of various banks differ in retail and corporate loans, identifying ‘safest’ and ‘riskiest’ institutions. Secondly, loan growth and credit risk sensitivity to macroeconomic shocks is analyzed using vector auto-regression. Macroeconomic shocks do not significantly increase NPL growth in the corporate segment. However, inflation and investment growth have a considerable impact on NPL growth in the retail segment (which is however almost three times less than the corporate). Based on these findings we conclude that there is no reason to expect rampant rise in corporate loan defaults in response to sudden changes in macroeconomic environment of Russia, though further growth of corporate loan segment increases credit risk, while the opposite is true about the retail sector.

Hidden “holes” in the capital of banks and the supply of credit to the real sector of economy

2018 ◽  
pp. 49-68 ◽  
Author(s):  
M. E. Mamonov
Keyword(s):  
Credit Risk ◽  
The Other ◽  
Real Sector ◽  
Capital Management ◽  
Loan Loss ◽  
Short Term ◽  
The Real ◽  
Ex Post ◽  
The One

Our analysis documents that the existence of hidden “holes” in the capital of not yet failed banks - while creating intertemporal pressure on the actual level of capital - leads to changing of maturity of loans supplied rather than to contracting of their volume. Long-term loans decrease, whereas short-term loans rise - and, what is most remarkably, by approximately the same amounts. Standardly, the higher the maturity of loans the higher the credit risk and, thus, the more loan loss reserves (LLP) banks are forced to create, increasing the pressure on capital. Banks that already hide “holes” in the capital, but have not yet faced with license withdrawal, must possess strong incentives to shorten the maturity of supplied loans. On the one hand, it raises the turnovers of LLP and facilitates the flexibility of capital management; on the other hand, it allows increasing the speed of shifting of attracted deposits to loans to related parties in domestic or foreign jurisdictions. This enlarges the potential size of ex post revealed “hole” in the capital and, therefore, allows us to assume that not every loan might be viewed as a good for the economy: excessive short-term and insufficient long-term loans can produce the source for future losses.

CREDIT RISK AND COMMERCIAL BANKS’ PERFORMANCE IN NIGERIA: A PANEL MODEL APPROACH

2012 ◽  
Vol 02 (02) ◽  
pp. 31-38 ◽  
Author(s):  
KOLAPO T. Funso ◽  
AYENI R. Kolade ◽  
OKE M. Ojo
Keyword(s):  
Credit Risk ◽  
Commercial Banks ◽  
Commercial Banking ◽  
Loan Loss ◽  
Return On Assets ◽  
Cross Sectional ◽  
Loan Loss Provision ◽  
Panel Model ◽  
Percent Increase ◽  
Credit Analysis

The study carried out an empirical investigation into the quantitative effect of credit risk on the performance of commercial banks in Nigeria over the period of 11 years (2000-2010). Five commercial banking firms were selected on a cross sectional basis for eleven years. The traditional profit theory was employed to formulate profit, measured by Return on Asset (ROA), as a function of the ratio of Non-performing loan to loan & Advances (NPL/LA), ratio of Total loan & Advances to Total deposit (LA/TD) and the ratio of loan loss provision to classified loans (LLP/CL) as measures of credit risk. Panel model analysis was used to estimate the determinants of the profit function. The results showed that the effect of credit risk on bank performance measured by the Return on Assets of banks is cross-sectional invariant. That is the effect is similar across banks in Nigeria, though the degree to which individual banks are affected is not captured by the method of analysis employed in the study. A 100 percent increase in non-performing loan reduces profitability (ROA) by about 6.2 percent, a 100 percent increase in loan loss provision also reduces profitability by about 0.65percent while a 100 percent increase in total loan and advances increase profitability by about 9.6 percent. Based on our findings, it is recommended that banks in Nigeria should enhance their capacity in credit analysis and loan administration while the regulatory authority should pay more attention to banks’ compliance to relevant provisions of the Bank and other Financial Institutions Act (1999) and prudential guidelines.

scholarly journals Indicator Analysis of the Economic Development of Polish Regions in the Context of the Implementation of the Concept of Sustainable Development

2019 ◽  
Vol 8 (5) ◽  
pp. 210 ◽  
Author(s):  
Anetta Barska ◽  
Janina Jędrzejczak-Gas
Keyword(s):  
Sustainable Development ◽  
Economic Development ◽  
Economic Activity ◽  
Political Development ◽  
Development Economic ◽  
Regional Differentiation ◽  
The Sustainable Development ◽  
Explanatory Variables ◽  
Analysis And Evaluation ◽  
Indicator Analysis

The aim of the article is to present the regional differentiation of indicators characterizing the economic development of Polish regions in the context of the progress made in the implementation of the concept of sustainable development in 2010 and 2017. The authors focused primarily on determining the position of Lubuskie Province on the economic map of Poland. The article proposes a set of indicators monitoring one of the areas of sustainable development - economic development, which also take into account other areas of sustainable development, i.e. social development, environmental development, and institutional-political development. The main criterion for the selection of indicators were substantive premises and their completeness and accessibility across the regions. The analysis and evaluation of the proposed indicators (explanatory variables) were conducted within five thematic areas which mark the economic development of the regions and which are important from the standpoint of the sustainable development concept: 1) Potential of the economy 2) Innovativeness of the economy 3) Economic activity of enterprises, 4) Production and transportation, 5) Economic activity of households. The article consists of two sections. In the first section, based on literature review, the most important issues regarding the concept of sustainable development and the state of scientific research on the indicators of sustainable development at regional level are presented. The second section addresses the concept of indicator analysis on the basis of which an assessment of economic development of 16 Polish regions was carried out and the position of Lubuskie Province was determined against the backdrop of the other regions. The findings prompted an answer to the question concerning the economic development of Polish regions, and in particular of Lubuskie Province, in the context of the concept of sustainable development.Keywords: indicator analysis, region, sustainable development, economic development, Poland

scholarly journals Drivers of Individual Credit Risk of Retail Customers—A Case Study on the Example of the Polish Cooperative Banking Sector

Risks ◽  
2021 ◽  
Vol 9 (12) ◽  
pp. 219
Author(s):  
Rafał Balina ◽  
Marta Idasz-Balina
Keyword(s):  
Credit Risk ◽  
Financial Institutions ◽  
Predictive Power ◽  
Banking Sector ◽  
Key Factors ◽  
Logit Regression ◽  
Local Character ◽  
History Of ◽  
Cooperative Banks

The main aim of the research was to determine the key factors determining the level of credit risk of individual clients (clients in the form of natural persons, excluding companies) on the example of Polish cooperative banks according to the following features: transaction characteristics, socio-demographic characteristics of the customer, the customer’s financial situation, the customer’s history of cooperation with the cooperative bank where they applied for a loan, and the customer’s history of cooperation with other financial institutions. For the research gathered data from 1000 credit applications submitted by individual customers when applying for a credit in five different cooperative banks were used for the analyses. To assess the credit risk of retail clients we use logit regression models, and additionally, score cards were calculated. The results of the research indicate that among the factors with high predictive power there were the features characterizing the client’s history of cooperation with the cooperative bank, where they applied for a loan. It may mean that when assessing credit risk related to financing individual customers, cooperative banks due to their local character, have an advantage over other financial institutions.

scholarly journals Credit Management and Issues of Bad Debts: An Empirical Study of Listed Deposit Banks in Nigeria

2020 ◽  
pp. 32-49
Author(s):  
Peter E. Ayunku ◽  
Akwarandu Uzochukwu
Keyword(s):  
Risk Management ◽  
Credit Risk ◽  
Commercial Banks ◽  
Random Effect ◽  
Credit Risk Management ◽  
Loan Loss ◽  
Data Set ◽  
Credit Management ◽  
Loan Loss Provision ◽  
The Impact

This study examines the impact of credit management on firm performance amidst bad debts, among Nigerian deposit banks. Five hypotheses were formulated following the dependent variables of Return on Asset and Tobin Q. The independent variables employed for this study include: Loan Loss Provision, Loan to Deposit Ratio, Equity to Asset Ratio, and Loan Write off. This study is based on ex-post facto research design and employed a panel data set collected from fourteen (14) commercial banks over six years ranging from 2014 to 2019 financial year. We analyzed the data set using descriptive statistics, correlation and Ordinary Least Square Regression Technique. The random effect models established that non-performing loan, loan loss provision and equity to asset impact significantly on banks’ performance in both Return on Asset and Tobin-Q models. This suggests that the sampled banks need to establish efficient arrangements to deal with credit risk management. In all, credit risk management indicators considered in this research are important variables in explaining the profitability of Nigerian commercial banks. However, based on the outcome from the empirical analysis, the study carefully recommends that investors and shareholders in these banks should be aware of the possible use of provisions for losses on non-performing loans by managers for smoothening of profits. The shareholders specifically should be ready to meet optimal agency costs to reduce the manager's information asymmetry by hiring competent internal and external auditors.

scholarly journals Determinación de la humedad de suelo mediante regresión lineal múltiple con datos TerraSAR-X

2016 ◽  
pp. 73 ◽  
Author(s):  
G. García ◽  
M. Brogioni ◽  
V. Venturini ◽  
L. Rodriguez ◽  
G. Fontanelli ◽  
...  
Keyword(s):  
Land Surface ◽  
Multiple Linear Regression Model ◽  
Heat Fluxes ◽  
Distributed Data ◽  
Explanatory Variables ◽  
Regression Techniques ◽  
Geophysical Information ◽  
Electromagnetic Models ◽  
Agricultural Regions ◽  
Microwave Sensors

<p>The first five centimeters of soil form an interface where the main heat fluxes exchanges between the land surface and the atmosphere occur. Besides ground measurements, remote sensing has proven to be an excellent tool for the monitoring of spatial and temporal distributed data of the most relevant Earth surface parameters including soil’s parameters. Indeed, active microwave sensors (Synthetic Aperture Radar - SAR) offer the opportunity to monitor soil moisture (HS) at global, regional and local scales by monitoring involved processes. Several inversion algorithms, that derive geophysical information as HS from SAR data, were developed. Many of them use electromagnetic models for simulating the backscattering coefficient and are based on statistical techniques, such as neural networks, inversion methods and regression models. Recent studies have shown that simple multiple regression techniques yield satisfactory results. The involved geophysical variables in these methodologies are descriptive of the soil structure, microwave characteristics and land use. Therefore, in this paper we aim at developing a multiple linear regression model to estimate HS on flat agricultural regions using TerraSAR-X satellite data and data from a ground weather station. The results show that the backscatter, the precipitation and the relative humidity are the explanatory variables of HS. The results obtained presented a RMSE of 5.4 and a R<sup>2</sup>  of about 0.6</p>

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