Abstract

Impact of Non-Performing Loans on Bank s Profitability: Empirical Evidence from Commercial Banks in Kosovo

Highlights

  • Banks are financial institutions who provide financial services that influence society's welfare and economic perspective

  • Credit risk presents the main risk faced by commercial banks, and banks’ financial performance is dependent directly on the quality of the loan portfolio (Giesecke, 2003; Klein, 2013)

  • Identification of determinants that influence non-performing loans is important for efficient credit risk management and supervisory bodies to ensure the financial stability of the banking sector (Ozil, 2019)

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Summary

Introduction

Banks are financial institutions who provide financial services that influence society's welfare and economic perspective. Credit risk presents the main risk faced by commercial banks, and banks’ financial performance is dependent directly on the quality of the loan portfolio (Giesecke, 2003; Klein, 2013). Credit risk, measured by non-performing loans, is used as a determinant for bank profitability.

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