scholarly journals Macro and bank specific determinants of nonperforming loans in polish commercial banks

2021 ◽  
Vol 2021 (1) ◽  
pp. 107-126
Author(s):  
Mihail Petkovski ◽  
Jordan Kjosevski ◽  
Kiril Jovanovski
Keyword(s):  
Commercial Banks ◽  
Nonperforming Loans

scholarly journals Bank Regulation and Level of Non performing Loans in Commercial Banks in Nakuru County Kenya

2020 ◽  
Vol 2 (2) ◽  
pp. 59-76
Author(s):  
Geoffrey Indeje Muhanji ◽  
Joseph Theuri
Keyword(s):  
Central Bank ◽  
Commercial Banks ◽  
Bank Regulation ◽  
Capital Adequacy ◽  
Liquidity Management ◽  
Macroeconomic Factors ◽  
Nonperforming Loans ◽  
Management Efficiency ◽  
Asset Quality ◽  
The Relationship

The study sought to determine the effect of bank regulation and level of nonperforming loans in commercial banks in Nakuru County Kenya. The specific objectives of the study were to explore the effect of capital adequacy on the level of nonperforming loans in commercial banks in Nakuru County Kenya, to find out the effect of asset quality on the level of nonperforming loans in commercial banks in Nakuru County Kenya, to evaluate the effect of liquidity management on the level of nonperforming loans in commercial banks in Nakuru County Kenya, to examine the effect of management efficiency on the level of nonperforming loans in commercial banks in Nakuru County Kenya and to determine the moderating effect of macroeconomic factors on the relationship between bank regulation and level of nonperforming loans. The literature review focused on portfolio theory of investment, capital asset pricing theory and the capital buffer theory of capital adequacy. The primary data was collected using structured questionnaires and secondary data was collected from the banking survey 2017 and central bank of Kenya annual supervisory reports. The study employed multiple linear regression analysis and the finding revealed that there exist a negative and statistically insignificant relationship between capital adequacy and non-performing loans. It was also observed that there exist a negative and statistically insignificant relationship between liquidity management and non-performing loans. On the other hand, there exist a positive and statistically significant relationship between asset quality and non-performing loans. Similarly, there exist a positive and statistically insignificant relationship between management efficiency and non-performing loans. Finally, the findings indicated that macroeconomic factors have moderating effect on the relationship between bank regulations and non-performing loans in commercial banks in Nakuru County. It was concluded that asset quality positively influences non-performing loans while management efficiency influence positively the non-performing loans. Similarly, liquidity management exerts a negative influence on non-performing loans. Finally, capital adequacy influence negatively on non-performing loans. The study recommends that Central Bank of Kenya should regularly access lending behavior to ensure compliance with banking regulations to avoid increasing incidences of non-performing loans. In addition, Central Bank of Kenya should closely monitor banks with deteriorating asset quality. Further, Central Bank of Kenya should strictly monitor the economic sector and ensure that banks provide adequate provisions for loans to mitigate risks of default. Furthermore, banks should maintain a good balance on deposits and lending out loans and adhere to regulators decisions about monetary policies. Finally, banks should increase the operational efficiency of operation weakness and improve corporate governance on the sanction of loans and Central Bank of Kenya should focus on managerial performance in order to detect banks with potential increases in non-performing loans.

Do firm-specific risks affect bank performance?

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ahmed Imran Hunjra ◽  
Asad Mehmood ◽  
Hung Phu Nguyen ◽  
Tahar Tayachi
Keyword(s):  
Financial Performance ◽  
Commercial Banks ◽  
Negative Impact ◽  
Generalized Method Of Moments ◽  
Bank Performance ◽  
Content Type ◽  
Nonperforming Loans ◽  
Operational Risks ◽  
Bank Managers ◽  
The Impact

PurposeThe authors examine the impact of credit, liquidity and operational risks on the financial performance of commercial banks of South Asia.Design/methodology/approachData are extracted from DataStream of 76 commercial banks of four countries, i.e. Pakistan, India, Bangladesh and Sri Lanka for the period 2009–2018. The generalized method of moments (GMM) is used to analyze the results.FindingsAll three risks are significantly associated with financial performance. The authors find that Z-score positively affects the bank performance, whereas the nonperforming loans (NPLs) ratio has a negative impact on financial performance of bank. Liquidity risk analyses show the current and loan-to-deposit (LTD) ratios positively and negatively, respectively, affect financial performance. While operational risk positively affects financial performance. The authors further present the significant effects of joint occurrence of credit and liquidity risks on financial performance.Practical implicationsFor managing credit risk, banking management should ensure the policies for granting loans and timely reimbursement of the loan installments from customers. Bank managers should regularly monitor the liquidity position by maintaining the necessary levels of loans and deposits. Management should retain a healthy capital charge to meet operational risks.Originality/valueCredit, liquidity and operational risks are considered the most important categories of risk which are faced by financial institutions. To the best of the authors’ knowledge, this is the first study which investigates the impact of these risks on banks’ financial performance in selected South Asian countries. The results of this study have relevance and probable generalizability about the impact of risks on the performance of banks in emerging markets.

scholarly journals Deprived Sector Lending and Non-Performing Loans in Nepal

2021 ◽  
Vol 8 (4) ◽  
pp. 1
Author(s):  
Sudan Kumar Oli
Keyword(s):  
Commercial Banks ◽  
Empirical Relation ◽  
Secondary Data ◽  
Fiscal Year ◽  
Regression Result ◽  
Operational Cost ◽  
Nonperforming Loans ◽  
Lending Policy ◽  
Beta Coefficient ◽  
Direct Lending

This study investigates the empirical impact of deprived sector lending on the nonperforming loans of commercial banks in Nepal using secondary data collected from 27 commercial banks from the fiscal year 2009 to 2018 with 262 observations. The study employed the OLS regression method for the robustness test of the result. The study establishes empirical relation between deprived sector lending and nonperforming loan of banks which was the major motivation of this study. The basic regression result shows that beta coefficient of DSL is negative which indicates higher the ratio of deprived sector lending, the lower would be the NPL and vice-versa. Similarly, this study also examines the DSL movement's impact on NPL. The result shows that the beta coefficient of ∆DSL is significantly negative with ∆NPL. This indicates that the higher the growth of DSL, the lower would be NPL growth and vice-versa. This shows that the influence of DSL is very low as per this empirical result. Overall, the study shows there is an inverse relationship between deprived sector lending and nonperforming loan of banks. The result indicates that the remark of commercial bank’s on the deprived sector lending policy of NRB is not true. The operational cost might increase with direct lending to deprive sector and that leads to decrease in the bank’s overall profit but not increases their NPL.

scholarly journals The Relationship between Lending Rate and Nonperforming Loans in Commercial Banks: Evidence from Pakistan (2008-2014)

2021 ◽  
Vol 1 (2) ◽  
pp. 89-104
Author(s):  
IHTESHAM KHAN ◽  
ROOHUL AMIN ◽  
SHAH RAZA KHAN ◽  
MUHAMMAD ILYAS
Keyword(s):  
Commercial Banks ◽  
Positive Relationship ◽  
The State ◽  
Annual Reports ◽  
Significant Positive Relationship ◽  
Regression Methods ◽  
Nonperforming Loans ◽  
Lending Rate ◽  
Lending Rates ◽  
The Relationship

The objective of the study was to examine the relationship between lending rate and nonperforming loans in commercial banks of Pakistan. The study collects data on bank size and nonperforming loans from the annual reports of commercial banks and lending rates data was collected from the state bank of Pakistan statistical bulletins for the period of 2008-2014 and the data was analyzed through SPSS to examine the relationship between lending rate and nonperforming loans. The study used correlation and regression methods. The study found a significant positive relationship between lending rate and nonperforming loans in commercial banks of Pakistan

scholarly journals Agency Cost and Credit Risk Management: Empirical Evidence from Listed Commercial Banks in Nigeria

2020 ◽  
pp. 1-17
Author(s):  
Peter E. Ayunku ◽  
Akwarandu Uzochukwu
Keyword(s):  
Credit Risk ◽  
Commercial Banks ◽  
Random Effect ◽  
Agency Cost ◽  
Data Set ◽  
Nonperforming Loans ◽  
Ex Post ◽  
Effect Regression ◽  
Ex Post Facto ◽  
New Policies

This study explores the relationship between agency cost and credit risk of quoted commercial banks in Nigeria. Five hypotheses were formulated following the dependent variable of credit risk which we proxy as non-performing loan. The independent variables employed for this study include agency cost, profitability, income diversification, corporate governance and firm leverage. This study is based on ex-post facto research design and made use of panel data set collected from twelve (12) quoted commercial banks within thirteen years of 2007 and 2019 financial year.  We analyzed the data set using a random effect regression analysis. The result showed that agency cost which is measured as managerial inefficiency is strongly and positively related to the non-performing loan of commercial banks in Nigeria during the period under investigation. However, in light of the obtained result, we recommend that bank managers in Nigeria should take a keen look at the activities that make up agency cost. Hence, they should consider new policies that will lower the size of its agency cost to reduce the level of nonperforming loans which will ultimately create room for greater profit.

scholarly journals A Network DEA Model with Super Efficiency and Undesirable Outputs: An Application to Bank Efficiency in China

2014 ◽  
Vol 2014 ◽  
pp. 1-14 ◽  
Author(s):  
Jianhuan Huang ◽  
Juanjuan Chen ◽  
Zhujia Yin
Keyword(s):  
Commercial Banks ◽  
Black Box ◽  
Undesirable Outputs ◽  
Accurate Assessment ◽  
Input Output ◽  
Network Dea ◽  
Bank Efficiency ◽  
Nonperforming Loans ◽  
The Us ◽  
Bad Outputs

There are two typical subprocesses in bank production—deposit generation and loan generation. Aiming to open the black box of input-output production of banks and provide comprehensive and accurate assessment on the efficiency of each stage, this paper proposes a two-stage network model with bad outputs and supper efficiency (US-NSBM). Empirical comparisons show that the US-NSBM may be promising and practical for taking the nonperforming loans into account and being able to rank all samples. Applying it to measure the efficiency of Chinese commercial banks from 2008 to 2012, this paper explores the characteristics of overall and divisional efficiency, as well as the determinants of them. Some interesting results are discovered. The polarization of efficiency occurs in the bank level and deposit generation, yet does not in the loan generation. Five hypotheses work as expected in the bank level, but not all of them are supported in the stage level. Our results extend and complement some earlier empirical publications in the bank level.

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