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This paper applies a novel time series-based additive nonparametric quantile regression technique to stress test the credit risk of conventional and participation banks in Turkey. We particularly examine the effects of the exchange rate, unemployment rate, the policy interest rate, and the public debt-to-GDP ratio on the non-performing loan ratio (NPL) of Turkish banks at distinct quantile levels. We find that their effects are heterogeneous and significantly vary across different types of banks and quantiles. Overall, participation banks are more vulnerable to negative scenarios associated with the exchange rate, unemployment rate, and public debt ratio than conventional banks. [ABSTRACT FROM AUTHOR]

The aim of this to study is to examine how non-performing loans on the balance sheets of Japanese banks affect their performance by adopting a material balance principle. The paper outlines how the material balance conditions can be applied when modelling banks' production process in the presence of non-performing loans. The paper utilizes the generalized weak G-disposability principle which accounts for the heterogeneity among banks' input quality. We test how an input-oriented model (non-performing loans are treated as an input), the weak disposability assumption and the adopted material balance approach, affect banks' performance levels. We apply our test on a sample of Japanese banks over the period 2013 to 2019. Our findings indicate that the input-oriented model and the material balance estimator even if they present similar distributions, they account differently the effect of non-performing loans' fluctuations over the examined period. In addition, the results under the weak disposability assumption are found to be different compared to the material balance measures and less sensitive to banks' non-performing loans variation levels. We also provide evidence that the generalized weak G-disposability assumption captures better banks' performance fluctuations that has been caused by the restructuring of the Japanese banking industry. [ABSTRACT FROM AUTHOR]

This study explores the role of local wisdom in managing non-performing loans (NPLs) within Village Credit Institutions (VCDs) in Bali during the COVID-19 pandemic. Using a case study approach, the research examines the effectiveness of traditional mechanisms such as awig-awig (customary law) and pararem (community agreements) in maintaining social cohesion and addressing financial challenges. Through qualitative methods, including in-depth interviews with key stakeholders and document analysis, the study seeks to understand how these customary practices contribute to resolving NPLs. The findings indicate that local wisdom fosters community engagement and dialogue, offering temporary solutions to financial problems during crises. These traditional mechanisms promote a sense of collective responsibility and help maintain social harmony by facilitating discussions between debtors and VCDs. However, the research also highlights several limitations. While effective in the short term, local wisdom struggles to enforce sanctions and provide long-term resolutions, especially during severe economic downturns like the pandemic. This issue is compounded by external factors such as Bali’s heavy reliance on tourism, which makes the local economy highly vulnerable to global disruptions. The lack of digital infrastructure and the absence of integrated government support further intensify the challenges faced by VCDs in managing NPLs. The study concludes that while local wisdom remains a valuable tool for crisis management, its effectiveness is constrained in times of prolonged financial instability. For VCDs to achieve long-term sustainability and resilience in future crises, it is essential to integrate traditional practices with modern financial systems. Additionally, stronger government support, including digital infrastructure development and comprehensive financial regulations, is crucial to ensure the sustainability of VCDs. This combination of traditional and modern strategies can help VCDs navigate future economic challenges more effectively and safeguard their role in the local economy.

This study examines the influence of macroeconomic indicators on nonperforming bank loans. This research focuses on the period from 2010:1Q to 2019:4Q to capture significant trends and fluctuations in the economy. Data for receivables to be liquidated as a proxy for nonperforming loans, the consumer price index as a proxy for inflation, total private consumption expenditures as a proxy for economic activity, gross domestic product and total (private) fixed capital expenditures as proxies for economic growth are analyzed using the ARDL bound test, FMOLS, DOLS and VECM Granger methodologies. This study addresses several key questions. First, it examines how the receivables to be liquidated relate to changes in total private consumption expenditures (LNPCE). The findings indicate that higher LNPCE decreases the ability of receivables to be liquidated in both the long run and short run. Second, it explores the impact of gross domestic product (GDP) fluctuations on the amount of receivables to be liquidated, revealing that a higher GDP increases the amount of receivables to be liquidated in both the long and short run. Last, the study assesses the extent to which changes in the consumer price index (CPI) influence the receivables to be liquidated, finding that a higher CPI increases the receivables to be liquidated in the long run.

The rapid expansion in recent fintech innovations has garnered researchers’ attention to evaluate its influence on the banking industry.

The purpose of this study is to gain a comprehensive understanding of the factors contributing to the current housing crisis in Greece and to offer a critical assessment of existing interventions on social policy. It focuses on the way in which the multiple crises over the past 15 years and their management have exacerbated social inequalities. Housing represents an illustrative case study. In terms of housing resources, a systematic process of reverse redistribution is attempted, from the lower and middle social classes towards higher ones, by the Greek governments. The framework for managing the existing challenges of housing precariousness, such as rising rents, non-performing loans, foreclosure auctions, energy poverty phenomena, and the privatization of the energy market, as well as the resulting landscapes of humanitarian crisis (homelessness and refugee management), all lead to a deterioration of housing conditions. This phenomenon is inherently connected with the values underlying neoliberal social policy. [ABSTRACT FROM AUTHOR]

This study focused on the determinant of macroeconomic variables on the non-performing loans of banks in the sub-Saharan African region using the fixed effect panel regression method. Data from twenty-two SSA countries from 2010 to 2021 were used. The results from the study provide a general indication that the macroeconomic environment matters a lot for non-performing loans within the banking sectors of SSA countries. It is therefore recommended that banks in the SSA sub-region learn to develop adaptive mechanisms to address the effects of macroeconomic shocks on their loan policy. These measures may come in the form of well-diversified portfolio systems that will improve banks' hedging. [ABSTRACT FROM AUTHOR]

Copyright of Contaduría y Administración is the property of Facultad de Contaduria y Administracion-Universidad Nacional Autonoma de Mexico and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Copyright of Journal of Administrative Sciences / Yonetim Bilimleri Dergisi is the property of Canakkale Onsekiz Mart Universitesi, Terzioglu Kampusu and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

The aim of this research paper is to empirically identify the impact of internal and macroeconomic factors on the stability of the banking sector in Kosovo. The stability of banks is determined by the amount of risk they can be exposed to. NPLs (non-performing loans) are one of the main factors used to measure banking stability. In addition to the literature in the Eurozone and the United States, there is a gap in Kosovo regarding the impact of internal and macroeconomic factors on the stability of the banking sector. This paper aims to fill the existing gap and expand the literature and knowledge on banking stability. The paper attempts to answer the following questions: which are the internal and macroeconomic factors that impact the banking stability in Kosovo? Regression modelling using panel OLS, random and fixed effects was used to generate the main findings and results. Results show that return on assets, loan loss provision, capitalization, and bank size at p-value <0.05 have a statistically significant impact on non-performing loans, whereas loan growth, GDP, and inflation have statistically insignificant impact on nonperforming loans. The research paper is helpful for senior management of the banks, central bank, investors, and government to take into consideration the internal and macroeconomic factors that impact the banking stability. [ABSTRACT FROM AUTHOR]

The research was conducted to see how cost of funds (COC), and non-performing loans (NPL) on profitability is measured by return on assets (ROA). The research method used is descriptive and verification methods. Secondary data is sourced from Regional Development Banks of West Java and Banten Provinces in Indonesia quarterly financial reports for 2014 - 2022, while the data analysis technique uses multiple linear regression analysis. The results of the research are that COF and NPL has a negative and significant effect on ROA. Simultaneously, COF and NPL have a significant effect on ROA. The results of this research are useful for bank management in determining funding strategies with low cost of funds, and credit management strategies so that non-performing remains healthy. [ABSTRACT FROM AUTHOR]

Copyright of Economic Series of the Bulletin of the L.N. Gumilyov ENU is the property of L.N. Gumilyov Eurasian National University and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

This study investigates the impact of COVID-19 on the non-performing loans (NPLs) in Europe, distinguishing by European subregion, country-level prosperity, NPL type, and NPL economic sector. We utilized panel data analysis covering the period 2015Q1–2021Q4 while controlling for macro, bank-specific, and regulatory indicators. We derived that the COVID-19 deaths and the strictness of lockdown measures positively affected the NPLs, while the economic support policies exerted a negative effect. Profitable, capitalized banks fared better. The strictness of lockdown measures hindered the ability of SMEs to repay their loans, increasing their NPLs. Sectors involving physical work-related activities also experienced an increase in their NPLs. We also deduced that bank securitization and national culture significantly contributed to NPL reduction. [ABSTRACT FROM AUTHOR]

Asset quality management plays a critical role in shaping the financial health and profitability of banks. Moreover, the frequent loan scams have made banking activities questionable. Therefore, non-performing loans (NPL) must get proper consideration and supervision to lessen the occurrence of loan scams (Abdul Aziz et al., 2009). This study investigates the relationship between asset quality management and bank profitability, focusing on key indicators such as return on equity (ROE) and return on assets (ROA). Additionally, we examine specific metrics related to asset quality. The impact of asset quality management on bank profitability is investigated in this research through ten banks between 2017 and 2021. ROE and ROA will be used to measure the dependent variables of profitability; NPL, the total impairment charges to total operating income, and the total impairment charges to gross total loans (TL) will be used to measure the independent variables of asset quality management. Our analysis reveals a strong positive association between effective asset quality management and bank profitability. Banks that actively manage their asset quality tend to exhibit better financial performance. Specifically, higher provisioning for impaired assets (as reflected in the impairment charges ratios) is linked to improved bank stability and resilience. [ABSTRACT FROM AUTHOR]

This article analyzes the factors that impact allowance for impairment losses on banks in Indonesia, after the implementation of Indonesian Financial Accounting Standards (IFAS) 71. IFAS 71 became effective in 2020, replacing IFAS 55. IFAS 71 introduced several new methods for calculating the allowance for impairment losses. We collected data from conventional banks listed on the Indonesia Stock Exchange from 2016--2020. We created two models: the first will test the impact of several key factors like loans provided by banks, non-performing loans, and interest income towards allowance for impairment losses, while the second will test IFAS 71 implementation for these factors towards allowance for impairment losses. Out of these three factors, we concluded loans provided by banks hurt impairment loss allowance while the other two have a positive effect, regardless of IFAS 71 implementation. However, while this allowance is found to be higher after IFAS 71, the three key factors do not have a significantly stronger effect after IFAS 71 implementation. [ABSTRACT FROM AUTHOR]

This study reveals the long-term effects of several variables on Non-Performing Loans (NPLs) in Islamic banks (IBs) and conventional banks (CBs) in Malaysia. Using the Autoregressive Distributed Lag (ARDL) technique, the study supports a proactive approach and finds a persistent association between NPLs and asset quality, loan quality, unemployment rate, and inflation rate. Using the ARDL approach, the analysis covers the monthly period from 2018 to early 2021. This study aims to investigate NPLs at two different times: before and after the COVID-19 epidemic. The findings indicate that The ARDL model identifies Loan Quality 1 and 2 as significant influencers of NPLs in Malaysia's CBs. At the same time, asset quality and the unemployment rate show no significant impact. In contrast, IBs show a strong positive correlation between Asset Quality and NPL, with economic factors like the Unemployment Rate and Inflation Rate significantly affecting NPL, reflecting the unique risk-sharing nature of Islamic finance. These findings necessitate improved risk management strategies in both banking sectors. [ABSTRACT FROM AUTHOR]

This study aims to examine the influence of net interest margin, non-performing loans, and capital adequacy ratio on the stock prices of banks classified as KBMI 4, which are listed on the Indonesia Stock Exchange (IDX) for the period from 2014 to 2021. The research employs a purposive sampling method, resulting in a sample of four banking companies. Multiple linear regression analysis is utilized to analyze the data, with the assistance of the Eviews 12 software. The findings indicate that the capital adequacy ratio positively affects banking stock prices, whereas the net interest margin negatively impacts them. Conversely, non-performing loans do not exhibit a significant effect on the stock prices of these banks. [ABSTRACT FROM AUTHOR]

The Islamic finance movement, which became common since the 1940s, has found application areas in Malaysia, Pakistan, India and Egypt as a result of the search for an alternative to the classical financial order. This system, known worldwide as Islamic banking, is called participation banking in our country and the private sector or the state has taken various initiatives to operate on an interest-free basis. One of the most important problems of the institutions, which were revived as Special Finance Institutions in the 1980s and officially declared as Participation Banks in 2005, is the delays in the repayment of the financing provided, just like conventional banks. Since they are subject to the same law, the solutions that participation banks can produce for problematic loans cannot be different from those of conventional banks. This point challenges participation banks, which claim to be interest-free, but their paths intersect with Asset Management Companies, which are conventional financial institutions within the framework of their activities. According to the Banking Law No. 5411 and the regulations issued by the Banking Regulation and Supervision Agency, banks are required to determine specialized teams and special approaches for non-performing loans and, despite all efforts, loans that fall into non-performing loans must be removed from the financial records of the bank at the end of 3 years. Asset management companies, which came into play at this point and found an application area in our country with the regulations in 2002, have some privileges in terms of tax and financial records in order to fulfill the task assigned to them properly, and they can securitize the non-performing loans they take over and manage the collaterals attached to the loan as required. Similar problems of delayed repayment or non-payment of loans are also seen in financial institutions around the world. In the case of Iran, where the banking system in the country is entirely composed of Islamic banks and the system is managed by the Central Bank of Iran from a single source, the first measure for non-performing loans is the application of a profit share ceiling. Although there is an upper limit on the profit share that banks can give to their customers, despite all measures, loan delays reach significant levels due to the dual financial system in the country, one side of which is composed of semi-official institutions. In the Iranian banking system, loans must be delayed two to six months in order to be considered non-performing loans. Non-performing loans are monitored for up to eighteen months, and the loan debt may be written off if all legal remedies for the collection of the arrears are exhausted. In Pakistan, where the share of Islamic banking in the total banking sector is 20%, the Central Bank of Pakistan is at the center of the financial system. In the Pakistani banking sector, the classification of overdue loans and the provision ratios to be set aside for loans differs according to criteria such as the size of the company to which the financing is extended, the sector and the period of delay. Islamic banks use various contracts to restructure non-performing loans, and in the event of failure to collect as a result of these transactions, the debt is irrevocably sold to restructuring companies. The situation is similar in Egypt, where the country's banking system is largely composed of conventional banks, with Islamic banking at 4.5%. In the financial system coordinated by the Central Bank of Egypt, which is at the center of the system, a serious examination is carried out prior to the allocation process to ensure that loans do not fall into arrears. Despite all measures, loans that are overdue for more than ninety days are classified as non-performing loans and legal proceedings are initiated. An important point that distinguishes the Egyptian practice from others is that there is no surplus accrual for overdue loans. For loans classified as overdue, surplus accrual is stopped and this is noted in the financial records of the relevant bank. If, despite all attempts, the delinquency remains uncollected at the end of the 3-year period, the debt is written off. In Indonesia, where the banking system is classified both in terms of its authority to access the country's general payment systems and in terms of its operational competencies, and where conventional banks are predominant and the share of Islamic banks is 7%, the Bank of Indonesia is at the center of the system. In the country where overdue loans are classified under five headings, there is a specially authorized institution for the restructuring of non-performing loans. These institutions provide capital inflows by securitizing the non-performing loans they take over with a practice similar to asset management companies in Türkiye. In Malaysia, where Islamic banks constitute 30% of the banking system, there are various regulatory and supervisory institutions as well as central banks in the financial system. Thanks to the institution established by the state in 1998 to manage non-performing loans, Malaysia was able to quickly repair the damage it suffered from the Asian Financial Crisis. In Malaysia, which today manages the process with different institutions with expertise for retail and corporate customers, the most important rule for sales to asset management companies is that the company to which the debts will be transferred must have at least 51% local ownership. Globally, the share of non-performing loans in total loans in Islamic banking is around 2.5%, and the countries analyzed are close to this level, with the exception of Iran. On the other hand, considering the practices in the countries examined, it is obvious that in addition to the laws and regulations in force in our country regarding the restructuring or disposal of the non-performing loans of participation banks, there is a need for some practices in accordance with Islamic finance. [ABSTRACT FROM AUTHOR]

The role of asset quality in impacting bank lending has been examined in several studies. What has however not been examined is how asset quality interacts with monetary policy to influence bank lending or what is popularly referred to as the asset quality channel of monetary transmission. Employing data during 2011–2020, we examine whether there exists an asset quality channel of monetary transmission for MENA country-banks. The findings provide strong support in favour of an asset quality channel of monetary transmission. In particular, the baseline results suggest that a one percentage point increase in the impairment ratio leads to a decline in bank lending by 11%. These findings differ across key bank characteristics such as profitability, capital and funding costs for conventional versus Islamic banks. Relatedly, macroprudential policies play an important role in arresting asset quality deterioration. [ABSTRACT FROM AUTHOR]

Climate change poses significant challenges across various sectors, particularly within the financial realm, where the stability of banking systems is paramount. Non-performing loans (NPLs), as critical indicators of financial health, may be considerably influenced by climatic factors. This study delves into the impact of climate change on NPLs within the Chinese banking sector from 2010 to 2022, focusing on the influence of greenhouse gas (GHG) emissions. Utilising a comprehensive dataset and advanced econometric models (including panel quantile regression, sensitivity analysis and balanced panel data models), this research illuminates the intricate relationship between environmental changes and financial health. The research also discovers a significant climate change impact on NPLs, with increased GHG emissions leading to varied responses among banks. This variation reflects the different risk profiles and adaptive capacities of banks to climate-related financial risks. Banks demonstrating higher adaptability to climate change exhibit lower NPL ratios, underscoring the importance of strategic risk management and proactive adaptation in the banking sector. The research significantly advances the understanding of the financial implications of climate change and the interplay of climate variables with financial stability. It offers crucial insights for policy makers and banking institutions, emphasising the need to integrate climate risk into financial decision making and develop robust climate-resilient strategies for the banking sector's protection. In conclusion, the study enriches the discourse on the financial impacts of climate change and serves as an informative guide for stakeholders in navigating and addressing these emerging challenges. It underscores the necessity of embedding environmental considerations within banking practices to promote a resilient and sustainable financial system in the face of environmental uncertainties. [ABSTRACT FROM AUTHOR]

This study investigates the influence of non-performing loans on the profitability of banks operating in the Republic of North Macedonia, providing insights into the specific dynamics of the banking sector. Non-Performing Loans (NPL) represent a critical concern for banking institutions worldwide, reflecting potential credit risk and weakening of financial stability. In the context of North Macedonia, where the banking sector has a significant function in driving economic growth and development, understanding the relationship between NPLs and profitability is of great importance. Also, taking into consideration the importance of the ratio of Capital to Risk Weighted Assets (CRWA), this study also investigates the relationship between Capital to RWA and bank profitability. By employing an autoregressive distributed lag (ADL) model, the study intends to uncover the trends and the relationship between variables, by also considering how past values affect the current values of the bank profitability. The results of the analysis disclose a highly significant negative influence of the NPLs on the bank profitability indicators, such as Return on Equity (ROE) and Return on Assets (ROA). Thus, the findings reveal important insights for the policymakers and the banking industry in North Macedonia, aiding in the formulation of effective risk management strategies and regulatory policies aimed at mitigating the adverse effects of NPLs and capital needs on bank profitability. At the same time, the study is expected to contribute to the existing body of literature on the topic by offering empirical evidence specific for the Macedonian banking sector, thus filling the gap in the research landscape. [ABSTRACT FROM AUTHOR]

Non-performing loans (NPLs) are a financial item that affects bank profitability by reducing banks' income from lending and increasing non-performing loans at the industry level. This phenomenon is associated with a decrease in lenders' financial capacity due to inflation and exchange rate instability. We aim to analyze the impact of non-performing loans on the Romanian economy based on an econometric model for the period 2010-2021 using financial indicators on bank non-performing loans in correlation with macroeconomic indicators such as unemployment, inflation, GDP deflator and general government final consumption expenditure. The methods used consist of literature review on non-performing loans, consolidation of a database, application of econometric modelling techniques using linear regression. The results of the study support the possibilities of reducing the negative impact of non-performing loans through macroeconomic recovery and smart financial allocation.

The banking sector is one of the most important components of the financial sector. The development of the credit services market is one of the indicators of the economic development of any country. Thanks to credit operations provided by banks, legal entities and individuals can attract additional monetary resources for their needs. Due to the corona crisis, banks around the world suffered certain losses. In 2022, Ukraine faced new challenges due to a military invasion that caused an economic crisis. However, the banking system of Ukraine continues to operate efficiently despite the risks and crisis situation. The article examines the basis of the problem of bank lending. It was determined that with the increase in the volume of loans granted, the number of loans not returned by borrowers also increases, which in turn leads to a lack of monetary resources and, as a result, affects the level of interest rates on loans. It is indicated that one of the reasons for the increase in loan rates is the attraction of expensive resources. It is suggested that commercial banks of Ukraine control these risks, which will make it possible to ensure the quality of the credit portfolio. Also, a significant problem in the field of bank lending is defined as the lack of legal support for its implementation.

This study investigates the complex relationships among social and cultural contexts, nepotism, moral hazard, and non-performing loans (NPLs) within Indonesian financial institutions. Using survey data from a sample of these institutions, it employs structural equation modeling (SEM) to analyze these relationships. The findings reveal significant paths: social context significantly influences nepotism (β = 0.345 or 34.5%) and moral hazard (β = 0.347 or 34.7%), while cultural context has notable effects on nepotism (β = 0.157 or 15.7%) and NPLs (β = 0.379 or 37.9%). Nepotism (β = 0.168 or 16.8%) and moral hazard (β = 0.325 or 32.5%) also directly impact NPLs, highlighting their roles as mediators between social and cultural contexts and loan portfolio quality. These results underscore the pivotal roles of these factors in shaping organizational behavior and risk management practices. The study provides critical insights for practitioners, policymakers, and scholars focused on enhancing the sustainability and integrity of financial institutions in Indonesia. However, its reliance on cross-sectional data and self-reported surveys, and the focus solely on Indonesian institutions, may affect the generalizability of the findings. Despite these limitations, the study underscores the importance of addressing issues like nepotism and moral hazard to improve financial stability in the region.

This paper investigates how financial inclusion affects credit risk in the MENA region. It also checks whether board characteristics can moderate this relationship. We use a sample of MENA banks from 2004 to 2017 and perform the system generalized method of moment approach. Through the usage and access dimensions, we find that financial inclusion reduces the level of non-performing loans. These results are robust using an index of financial inclusion. For board characteristics, findings indicate that only board size, duality, and independent directors significantly affect the level of NPLs. Our findings prove that MENA banks benefit from an interaction between greater financial inclusion and board characteristics. These insights are consistent with theorists and scholars who are working on each dimension separately. As an extension of their work, we find that the interaction significantly affects the NPLs ratio. [ABSTRACT FROM AUTHOR]

The purpose of this paper is to investigate the intertemporal relationship between the non-performing loan ratio and bank lending and to analyze factors affecting loan growth using data from Mongolian commercial banks. There has been a lack of research on Mongolian banks' lending behavior due to their short history. Thus, this paper investigates the effect of the non-performing loan ratio on total loan growth using an ordinary least squares (OLS) regression model with panel data. We used bank-related variables such as the loan-to-deposit ratio, provision-to-gross loan portfolio ratio, equity-to-asset ratio, and liquidity ratio, and economic variables such as the real gross domestic product (GDP) growth rate, interest rate, and inflation rate. The results of this paper show that non-performing loans have a significant negative impact on total loan growth. The implication of this result is that non-performing loans affect banking efficiency, which, in turn, affects financial stability and the real economy. Moreover, high non-performing loans reduce banks' profits. Also, this paper found that loss reserve and the liquidity ratio have a positive effect on total loan growth, while the effects of the loan-to-deposit ratio and the equity capital ratio were not found to be significant. Additionally, from a macro perspective, the inflation rate has a positive effect on the total loan growth rate, while the interest rate has a positive effect on total loan growth rather than a negative effect. And real gross domestic product (GDP) growth does not affect the total loan growth rate. [ABSTRACT FROM AUTHOR]

The Islamic Republic of Iran has different policies in economic, social, cultural, and international aspects since the Islamic Revolution in 1979. This new political economy has had many socioeconomic challenges for the Iranian people since its emergence. Recently, the government of Iran has focused on the Iranian banking system, especially the problem of a high rate of NPLs, and their relationships with the current socioeconomic problems of Iran. The purpose of this research is to explain the political economy behind the non-performing loans (NPLs) of the Iranian banking system. This research has a qualitative design as a content analysis of Iranian officials’ disclosures by triangulations of the country's leadership, governmental powers, and Iranian economic-politic pundits for 1961-2023. Our findings show that NPLs in the Iranian banking system have five feeding pillars: the government’s anomalies, foreign policies, economic identity, social anomy, and geographic demography of Iran. These pentagon pillars of the political economy increase socioeconomic pressure on Iranian banking systems to spend low-quality lending towards the government’s socioeconomic strategies. However, the political economy significantly disturbs the country’s small markets and fuels social crises. The results provide insights about why Iran doesn’t have a steady economic development yet. [ABSTRACT FROM AUTHOR]

The paper examines the effects of governance quality and fiscal space on non-performing loans (NPLs) in Zimbabwe. We estimated pooled ordinary least squares (OLS) and quadratic regressions with panel-corrected standard errors (PCSE) and Driscoll-Kraay standard errors using the full dollarisation era dataset for 13 banks from 2009 to 2017. We noted that all the governance indicators are on average negative (bad) and that improvement in the rule of law, political stability and control of corruption stimulates reduction in NPLs if the indicators improve beyond -1.654, -0.876 and -1.361, respectively. More interestingly, the results revealed that an improvement in the interaction terms of political stability and control of corruption with rule of law, governance index and voice and accountability significantly reduces NPLs, which is new empirical evidence in the literature. Regarding fiscal space, we find evidence that fiscal balance positively and significantly affects NPLs. We contribute to the literature by providing new evidence on the role of governance quality in NPLs formation in Zimbabwe, especially when corruption and political stability interact with all governance indicators. We recommend that the Zimbabwean government improve political stability, control of corruption, voice and accountability and the rule of law to reduce NPLs. [ABSTRACT FROM AUTHOR]

Copyright of European Journal of Applied Economics is the property of Singidunum University and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

The drivers of non-performing loans (NPL) and the possible effects of the institutional and business environments on the credit risk exposure of banks in the panel of BRICS countries and segregated models are analyzed in this paper. The purpose of the study is to identify the relationship between banking, macroeconomic and institutional factors of non-performing loans of banks at the BRICS level for the period 1996–2020. The panel ARDL approach is used for this purpose. The Panel Granger causality test is applied to verify the hypothesis of the relationship between economic development and NPLs. Panel co-integration tests examine the existence of a long-term link between the same two variables. The results of the study demonstrated that a decrease in the proportion of NPLs results from boosting performance metrics like the Z-score. Because the banking industry has more resources as a result of higher financial development and/or financial intermediation, the amount of NPLs is reduced. Finally, our study demonstrates how important the institutional environment is for raising the quality of bank credit. It was concluded that the low level of NPLs in BRICS countries was largely linked to more effective anti-corruption management, robust regulatory standards, increased application of the rule of law, freedom of speech and accountability.

The study examines the current topic of bank lending in modern Ukrainian conditions. By analyzing the dynamics of credit activity and the financial condition of banks in Ukraine, the work reveals the main problems affecting this sector, such as a large share of non-performing loans, a decrease in the share of long-term loans, and a high lending rate. The conclusions of the work provide recommendations for improving the situation on the lending market in Ukraine. The modern economy of Ukraine is experiencing complex challenges related to the war in Ukraine, which was preceded by the COVID-19 pandemic and the global economic crisis. In this context, the article examines the role of credit as a key driver of economic stability and post-victory recovery. The study is based on the analysis of available data and literature sources, and also uses empirical methods to determine the impact of lending on economic recovery. The article highlights key aspects of lending, such as the role of banks, loan volumes, interest rates and overdue loans. The results of the study emphasize the importance of the development of the financial sector and the promotion of credit availability for enterprises and the population in the context of the economic recovery of Ukraine. The authors provide practical recommendations for the government and regulators to improve the credit environment and stimulate investment activity. This article is aimed at opening discussions and promoting further research into the role of lending in stimulating the economic recovery of Ukraine in the face of today's extremely complex challenges and may be useful for economists, theoreticians and practitioners. The scientific study analyzes how lending can affect the financial stability of Ukraine, in particular, how it can reduce financial risks and contribute to the stability of the economy. The impact of credit availability for various areas and sectors of the economy is considered. The article offers an important contribution to understanding and improving the effectiveness of lending as a tool for the economic recovery of Ukraine, emphasizing the need for a coordinated approach to this issue, taking into account the unique challenges and opportunities that exist at this stage of the country's development.

Efficiencies of Agricultural Credit Associations of the US Farm Credit System are measured quarterly from 2005 through 2020. A slacks-based measure based on the directional distance function is used with non-performing loans included as an undesirable output. This permitted efficiency scores to be measured by type of defined input or output. Generally, most Associations were highly efficient, but there was deterioration in mean efficiency over the years 2008–2018, a period of financial difficulties in the US agriculture. Efficiencies of Associations that merged or consolidated were tracked before and after these activities. Mergers and consolidations often led to increased efficiencies.

This study sought to determine the influence of interest rate on demand for loans among Rural Banks in Ghana. The study adopts an explanatory design of the quantitative approach. Secondary data from the Atiwa Rural Bank PLC database was used. The data were analysed using frequencies and percentages. Also, binary logistic and linear regression were used in analysing the relationship among the key variables of this research. The study found that interest rate of Atiwa Rural Bank PLC was rated as moderate while repayment status was high. There were differences between the category of the respondents and the repayment status. More males repay their loans as compared to females and groups. Also, differences existed between the employment status of the respondents and the repayment status. Moreover, insignificant differences were identified between the employment status of the respondents and the repayment status. Interest rate affects loan period positively. Also, a strong positive correlation between interest rate and loan period was determined. Interest rate affects amount of facility negatively. Moreover, credit facility with high interest rate is 1.020 times more likely to default in paying back the credit facility as compared to respondents who obtained their credit facility as a moderate or low interest rate. Increasing interest rate was associated with low or default in repayment of credit facility. The study therefore, recommend that management of the Atiwa Rural Bank PLC put up measures to able to track and retrieve all small amount of facility or loans given to clients. Also, the management of the Atiwa Rural Bank PLC should target more salaried workers and loans used for emergency services such as medical bills, school fees among others in order to reduce Non-Performing Loans (NPL). Moreover, the management of the Atiwa rural bank should improve upon the mechanisms implemented regarding giving of group loans and repayment issues. [ABSTRACT FROM AUTHOR]

Banks, as central entities within the economic sphere, are responsible for maintaining stability and integration, one aspect of which is preserving profitability. A common measure for evaluating a bank’s performance in generating profits through operational activities, which plays a crucial role in this context. This study aims to investigate the extent to which the loan-to-deposit ratio (LDR), profitability, and capital adequacy ratio (CAR) impacts the return on assets (ROA), with non-performing loans (NPL) serving as a moderating variable. By employing quantitative methods, this research analyzes processed data from the company’s financial reports. The study period spans from 2015 to 2020, a time during which ROA, NPL, operating expense to operating income (BOPO), net interest margin (NIM), and CAR experienced fluctuations in conventional banks, leading to a research gap. The rationale behind this investigation stems from these observed fluctuations. This study focuses on all commercial banks supervised by the financial services authority (OJK), using a sample of 15 national private banks as the population. Data analysis techniques encompass descriptive analysis, partial least squares (PLS), and hypothesis testing. The findings reveal that CAR and LDR do not have a significant impact on ROA. In contrast, NIM and BOPO exert a considerable influence on ROA. However, no substantial effect was observed in the NPL interaction, which moderates the relationship between LDR, BOPO, NIM, and CAR on ROA. [ABSTRACT FROM AUTHOR]

The research investigates the determinants of private banks profitability in Egypt. The determinants are bank specific (liquidity, capital adequacy, bank size, asset structure, credit risk, and non-performing loans), industry-specific (industry concentration and banking industry development), and macroeconomics (economic growth and inflation). It is an empirical study applying a quantitative method for data analysis and the type of data is secondary data. The sample size of the research is 15 private banks on the Egyptian and the panel data for the research is 2013–2022. The multiple linear regression analysis using the Eviews 12 application as an analytical tool by applying generalized least squares model. The profitability of private banks, which is the dependent factor, is calculated by two measurements, Return on Assets and Return on Equity with ten determinants of profitability as independent variables. Results indicate that capital adequacy, economic growth bank size, and inflation has a positive significant effect on private banks profitability in Egypt. While NPL, liquidity and credit risk have significant negative effect on private banks profitability in Egypt. Based on the results recommendations are provided for bank management to maximize their profitability. [ABSTRACT FROM AUTHOR]

This study aims to econometrically investigate the relationship between non-performing loans and Euro and USD indices in Turkey. The data set of the study consists of the Turkish banking sector non-performing loan ratio and Euro and American Dollar (USD) indices variables for the period 01/2003-09/2023. Time series analyses were used to test the relationship between the variables. Augmented Dickey-Fuller (ADF) and Phillips-Perron (PP) unit root tests were applied to the data. Since the series became stationary at different levels, the ARDL (Autoregressive Distributed Lag Bound Test) test, one of the cointegration tests, was applied. Afterward, whether there is causality between the variables and if there is a causality relationship, the determination of the direction of causality is mutually tested with the "Granger Causality" method. According to the results of the research, a cointegration relationship was found between the non-performing loan ratios of the Turkish banking system and the Euro and USD indices. In the long run, it is concluded that a 1% increase in the Euro index is associated with a 2.93% decrease in non-performing loan ratios. On the other hand, in the short run, Euro and USD index values have no effect on non-performing loan ratios. According to the results of the Granger causality test, a unidirectional Granger causality relationship was detected between nonperforming loan ratios and the Euro index. A similar unidirectional causality relationship was also found between the Euro index and the USD index. [ABSTRACT FROM AUTHOR]

As part of the credit risk management process of financial institutions, the non-performing loans (NPLs) ratio remains one of the essential components that distinguishes the well-managed assets of a bank. In this paper, we aim to empirically forecast the level of non-performing loans (NPL) including afflicted periods like the COVID-19 pandemic using a seasonal ARIMA model. Our analysis is based on the NPLs level observed in the Albanian banking system between December 2015 and December 2022. The results indicate that the seasonal ARIMA (0,1,1)x(2,2,2)12 is the appropriate model that can be applied to predict the monthly level of NPLs. The results also reveal that the expected average monthly ratio of NPLs remains stable, with a slight decrease until the end of 2023. Efforts to be proactive rather than reacting post-factum involve using mechanisms and forecasting models to define non-performing loan ratios and better manage them. This paper considers significant implications in credit risk management in terms of developing actions to manage the magnitude of non-performing loans throughout the COVID-19 pandemic. [ABSTRACT FROM AUTHOR]

The availability of bank loans is a vital component in determining the investment and spending patterns that influence economic growth. This article examines the threshold effect of loan growth on non-performing loans (NPLs) in the Zimbabwean banking industry during dollarization. The study employed panel threshold regression models developed by Seo et al. (2019) and Kremer et al. (2013) on a panel of thirteen banks from 2009 to 2017. The study revealed that locally owned banks held a higher percentage of NPLs (12.7%) than foreign-owned banks (6.1%) during the period under study. The study also documents a loan growth threshold level of 38%. On average, the industry lends excessively, as demonstrated by the 48% loan growth rate. Primarily, local banks dominate this rate by lending above the threshold compared to foreign banks. The study observed that, below and above the threshold, loan growth exerts a negative and significant effect on NPLs. Based on the results, it can be recommended that banks should devise strategies to maintain a steady loan growth rate, enhance profitability, and effectively monitor liquidity risk exposure. The findings provide insights into reviewing bank credit policies and prudential guidelines. [ABSTRACT FROM AUTHOR]