Non-performing Loans Research Articles

Capital price distortion, financial leverage, and credit risk in commercial banks

This paper uses panel data from 30 provinces and cities from 2012 to 2022 (excluding Tibet, Hong Kong, Macao, and Taiwan), and empirically examines the impact of capital price distortion and financial leverage on the non-performing loan (NPL) ratio of banks by constructing a dynamic panel system GMM model. The study finds that capital price distortion and financial leverage have a significantly positive impact on the NPL ratio of commercial banks. Increasing the degree of capital price distortion and financial leverage leads to a higher NPL ratio. Further analysis reveals that capital price distortion has a significantly positive impact on financial leverage, while Overcapacity has a significantly negative impact on financial leverage.

Elections and bank non-performing loans: Evidence from developed countries

Elections and bank non-performing loans: Evidence from developed countries

Indonesian Banking Financial Performance on Profitability Using Panel Data Regression

This study's goal is to determine if the return on assets (ROA) variable posted on the Indonesia Stock Exchange, together with the loan-to-deposit ratio (LDR), capital adequacy ratio (CAR), and non-performing loans (NPL), are correlated with profitability. The impact of return on assets (ROA) factors on the banking sector is investigated in this study. The research used a data sample of 245 from 49 financial institutions that have continuously fulfilled the necessary data requirements for a minimum of five years. Panel data, testing of panel data, testing of classical assumptions, and multiple regression analysis employing econometric views (E-views 12) are among the chosen analytical techniques. The ROA variable is unaffected by the LDR variable's t-test findings. In a similar vein, the ROA variable is unaffected by the t-test findings for the CAR variable. Moreover, the ROA variable is unaffected by the NPL variable's t-test findings. Nonetheless, the ROA variable is concurrently impacted by the LDR, CAR, and NPL factors.

PENGARUH KOMPETISI BANK TERHADAP STABILITAS SISTEM KEUANGAN PERBANKAN (STUDI KASUS PADA KBMI IV TAHUN 2019-2022)

The emergence of banking as an intermediary institution plays a very important role in the economy because it is the heart that must pump "money" and distribute it to all organs that need the money. Therefore, it is very important to maintain the stability of the banking financial system. The development of the banking system can trigger competition in the banking industry which can affect banking stability. This research was conducted to determine the effect of bank competition on the stability of the banking financial system. This research focuses on KBMI 4 data which is a large bank HHI index, market share and Loan to Deposit Ratio (LDR) used as a proxy for competition and Non-Performing Loans (NPL) as a proxy for banking financial stability. The analysis technique used is Panel Data Regression with KBMI 4th ​​quarter data for 2019-2022. Of these three variables, the HHI index and Loan to Deposit Ratio (LDR) variables have a significant effect on Non-Performing Loans (NPL). Meanwhile, the market share variable has no significant effect on Non-Performing Loans (NPL).

Pengaruh Rasio Keuangan dan Corporate Governance terhadap Kinerja Perbankan di Indonesia Periode 2020-2023

This research aims to prove the influence of financial ratios and corporate governance on banking performance in Indonesia for the 2020-2023 period. The research was conducted using secondary data in the form of bank financial reports listed on the Indonesia Stock Exchange (BEI) for the 2020-2023 period. The multiple linear regression method was used to analyze the data. The independent variables analyzed are non-performing loans (NPL), loan to deposit ratio (LDR), return on assets (ROA), net interest margin (NIM), capital adequacy ratio (CAR), independent commissioner, and ownership concentration. The dependent variable is Tobin's Q with firm size as a control variable. The research results show that LDR and ROA have a significant positive effect on Tobin's Q, while NIM has a significant negative effect on Tobin's Q. The results also state that NPL, CAR, independent commissioners, ownership concentration and firm size have no effect on Tobin's Q.

Analyzing the Impact of Cost of Funds and Non-Performing Loans on Bank Profitability

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.

A VAR Model for Non-Performing-Loans in Albania

The objective of this paper is to distinguish the relationship of macroeconomic and macro financial factors with non-performing loans in the Albanian banking system for the last 10 years, through a VAR model. VAR models are used to discover the relationship between variables, while the model selection criteria are used to select the appropriate lag. The chosen lag is 4 and the macroeconomic variables besides NPL included in the study are unemployment, economic growth and consumer price index. The results of the model proved that NPL ratio is sensitive to previous periods of NPL movement. Other macroeconomic variables are insignificant related to actual NPL. Furthermore, through the representation of fan charts we expect a reduction on NPL ratio on the upcoming quarter, which signifies a stronger economy.

Global banking systems, financial stability, and uncertainty: How have countries coped with geopolitical risks?

The study provides global evidence on the effects of news-based geopolitical risk (GPR), events, and associated risks on the financial stability of banking systems. With extensive large panel data from 179 economies over the past decades, we document strong adverse effects of GPR on financial stability with the predicted decrease (increase) in the bank (non-performing loans) Z-score. Commercial banking systems are heterogeneously exposed to GPR. Possible mechanisms to mitigate the effects of GPR include multidimensional financial development, enhanced world governance, and public finance. Our findings are robust with a battery of econometric approaches controlling for time-varying macroeconomic factors and banking characteristics (e.g., capitalization, concentration, performance) across countries and regions. The impacts of GPR on global financial stability are persistent when we control for systematic banking crises, economic policy, world uncertainty, and global uncertainty spillovers. While higher capitalized banks could secure ample financial stability with substantial military expenditure, the Asia Pacific and emerging economies are sensitive to widespread GPR. The study highlights the roles of institutional quality and world governance factors through times of uncertainty. In The context of global risks, greater global and comprehensive collaborations with mitigated GPR threats are inevitable for our inclusive growth toward Sustainable Development Goals. Our findings are critical to policymakers, advisers, and economists for our global financial stability and sustainable development.

KEMAMPUAN RASIO KEUANGAN DALAM MEMPREDIKSI PERTUMBUHAN LABA PADA PERUSAHAAN PERBANKAN YANG TERDAFTAR DI BURSA EFEK INDONESIA TAHUN 2012-2017

The research aims to: (1) test and prove the ability of the Capital Adequacy Ratio (CAR), Loan to Deposit Ratio (LDR), Non-Performing Loan (NPL), capability Operations on operating income (BOPO), Net Interest Margin (NIM), Return On Asset (ROA) and Return On Equity (ROE) in predicting profit growth Registered Banking Company in IDX. A research sample is a banking company listed on the Indonesia Stock Exchange. Data analysis methods use multiple linear regression analyses. From the research results are known that: (1) Capital Adequacy Ratio (CAR) is not able to predict the profit growth of registered banking companies in IDX: (2) Loan to Deposit Ratio (LDR) is not able to predict the profit growth of the banking company Registered in the IDX: (3) Non-Performing Loan (NPL) is not able to predict the profit growth of registered banking companies in IDX: (4) operating expenses on operating income (BOPO) is not able to predict the profit growth of the banking company Registered in IDX: (5) Net Interest Margin (NIM) is not able to predict the profit growth of registered banking companies in IDX: (7) Return On Equity (ROE) is able to predict the profit growth of the IDX-registered banking company

Analisis Pengaruh Kebijakan Dividen dan Kinerja Keuangan terhadap Nilai Perusahaan

Firm value is an instrument for investors to consider the success of a company in relation to its share price. The banking industry is one of the most important financial business entities for society because it plays a much needed role in economic and social funding activities. This research aims to examine the influence of dividend policy and financial performance (ROA, LDR and NPL) on the value of companies in the banking sector listed on the BEI in 2010-2022.Testing was carried out using explanatory statistical analysis, data normality testing, and hypothesis testing. The results of this research show that dividend policy (DPR), profitability (ROA), and liquidity (LDR) have a positive effect on company value, while liquidity (LDR) and non-performing loans (NPL) have a negative effect in the banking sector listed on the IDX in 2010 -2022 period.

Loan delinquency in private sector banks in Kerala

The Indian Banking Sector faces significant difficulties in recovering debt. The banker must understand the underlying causes of loan delinquency to address the problem efficiently. A delinquent loan becomes a NPL (Non Performing Loan) when the borrower failed to repay the loan for a period of 90 days or more. Delinquency is the sign of increased credit risk, warnings of willful default, poor asset quality management and operational inefficiency. It may help to predict the loan loss provision for the sub standard, doubtful and loss assets. This article explores the various causes of loan delinquencies of private-sector banks operating in Kerala. The analysis revealed that the retails and SMEs registered high level of loan delinquency. A significant difference was found between the old and new generation private sector banks for the Poor loan portfolio management, inadequate collateral, inadequate monitoring and follow-up. From the mean score it is evident that the NPA management in new generation private sector banks is appreciable when compared to old generation private sector banks.

Nexus between Non-Performing Loan and Profitability: A Comprehensive Analysis of the Banking Industry of Chittagong Stock Exchange (CSE)

Nexus between Non-Performing Loan and Profitability: A Comprehensive Analysis of the Banking Industry of Chittagong Stock Exchange (CSE)

The State of the Art of Academic Research on Non-performing Loans: A Structured Literature Review

This study aims to conduct a Structured Literature Review (SLR) on Non-Performing Loans (NPLs), defined as distressed credits or deteriorated loans, to explore their historical developments and prospects. NPLs played a prominent role in the global financial landscape post the 2007 economic crisis and, nowadays, their volume is managed thanks to regulatory intervention. However, academic research on this topic is limited and sparse, particularly in relation to market volume and prices trend, as well as emerging management strategies and sustainability’s perspective. Therefore, our objective is to fill this gap and observe how the academic literature has responded to the development of this instrument. The SLR, and its associated bibliometric analysis, conducted using the Biblioshny package available on R-Studio, were performed on a sample of 1.236 academic documents (Articles, Book Chapters and Conference Papers) available on Scopus and published from 2010 to 2023. The sample, selected through a rigorous and validated screening procedure, was then studied across variables defined in the Analytical Framework: Topics, Research Methods, Research Area and Geographical Area. Based on this analysis, as explicitly stated in the findings section, we observe specific trending topics and geographical areas of study related to NPLs. This study not only helps fill a significant gap in academic literature concerning NPLs, but also provides important implications for financial practice and economic policy conducted by professionals, aiding in a better understanding of how to address and manage NPLs in various economic and geographical contexts. The originality of this research lies in its structured approach and use of bibliometric analysis, to examine a wide range of academic publications over an extended period, serving as a potential base for further insights and future studies.

The Influence of Capital Adequacy Ratio (Car), Loan to Deposit Ratio (Ldr) And Non-Performing Loan (Npl) on Profitability

The Influence of Capital Adequacy Ratio (Car), Loan to Deposit Ratio (Ldr) And Non-Performing Loan (Npl) on Profitability

PENGARUH NON PERFOMING LOAN (NPL) TERHADAP RETURN ON ASSET (ROA) PADA BANK MANDIRI,TBK

This research aims to find out the influence of Non-Performing Loans (NPL) on ROA at Bank Mandiri. Correlational quantitative research is the research method used. Financial reports, profit and loss statements, balance sheets and cash flow reports for the years 2013–2022 are the research samples. For this particular case, purposive sampling was used. The relationship between the NPL variable and ROA was tested using simple linear regression, correlation coefficient, coefficient of determination, and two-square t-test. Analysis was carried out using SPSS v.22 software. In line with the high level of non-performing loans faced by banks. This is because the higher NPL level indicates that banks are not managing their credit optimally and are not providing adequate protection to their customers. As a result, the absence of principal and interest payments on credit facilities causes the bank's return on assets to decline along with the increase in the non-performing loan ratio

The Effect Of Reporting Financial Quality and Practices Accounting Ethical: Deposit Money Banks In Nigeria Perspective

This study looks into how Nigerian deposit money banks behave with creative accounting. Five deposit money institutions in Nigeria were included in the ten-year sample, which ran from 2007 to 2016. The study's multiple regression analysis showed that the performance of banks is not much impacted by non-performing loans. Additionally, it was discovered that while gross earnings significantly improved the performance of Nigerian deposit money institutions, total accrual had no discernible impact on that performance. While it would be absurd to believe that banks' creative accounting procedures have no good impact at all, it is possible to reduce their negative consequences to a minimum by implementing the International Financial Reporting Standard (a new standard), which places greater emphasis on ethical factors and reduces bank managers' latitude in selecting various accounting techniques. Financial statement fraud would be further decreased and of higher quality as a result.

Asset Allocation and Bank Resilience: China Insights

This research is based on the panel data from the annual reports of Chinese commercial banks for the years 2010-2020. A panel data model is constructed to empirically investigate the influence of commercial banks' asset allocation on financial stability. The study innovatively explores the differences between large-scale banks and general-scale banks in this context, as well as the interaction effects between large-scale banks and their methods of capital application. The findings indicate that: firstly, the higher the proportion of corporate loans in commercial banks, the stronger the stability. With the support of national policies, the operating environment for emerging industries has improved, leading to a reduction in bankruptcy risks and further decreasing the credit risk of related banks, which contributes to the enhancement of banks' financial stability. Additionally, compared to securities investments affected by market fluctuations, corporate loans are less susceptible to significant capital changes, and their risks are primarily determined by the operating conditions of the related enterprises, making them relatively controllable. Secondly, the higher the proportion of personal loans in commercial banks, the stronger the stability. The largest part of personal loans consists of housing mortgage loans, which have a low non-performing loan rate and high quality in China. Therefore, an increase in personal loans helps to enhance the financial stability of banks. Thirdly, large-scale banks exhibit lower financial stability. Due to the redundancy in management personnel in large-scale banks, management costs, adjustment costs, and transaction costs are relatively high. Furthermore, it is worth noting that because large-scale banks hold a significant amount of surplus funds, they are prone to excessive securities investments. Fluctuations in the securities market increase external risks and decrease financial stability.

Mapping Non-Performing Assets: Figures from Dimension AI database

The issue of non-performing assets (NPAs) or non-performing loans (NPLs) presents a significant challenge in the financial sector, affecting the stability and profitability of financial institutions globally. Conducting a bibliometric analysis of NPLs aims to understand the current research landscape and identify opportunities for future study, ultimately contributing to the development of effective strategies to manage and mitigate the impact of NPLs. Systematic review analyzes articles in Banking, Finance, and Investment, focusing on Non-Performing Assets (NPAs) or Non-Performing Loans (NPLs) published between 2020 and 2024. 33 documents were selected based on relevance to the topic. Through rigorous filtering and review, key insights, methodologies, and findings were extracted from the selected articles. Articles related to Non-Performing Assets/Loans, the Malaysian Management Journal emerged as the most cited publication, with five citations. The research conducted by the Institute of Cost Accountants of India and Vidyasagar University also garnered considerable attention. Among the individual papers, those authored by Maity and Tarak Nath received five citations each. The findings of the study highlighted key themes including Efficiency Decline, NPL Impact on Performance, Capital Adequacy Influence, Credit Risk Moderation, Persistent NPA Challenges, and Complex Factors Contributing to NPLs. These findings underscore the multifaceted nature of NPAs and NPLs, emphasizing their significant impact on the banking and finance sector. Study underlines landscape of NPAs/NPLs, identifying key themes, influential publications, and authors, thus guiding future research directions and strategic interventions for managing NPAs/NPLs in the financial sector. bibliometric analysis of NPAs/NPLs in Banking, Finance, and Investment fields from 2020 to 2024.

Credit Risk Management and Profitability of Nepalese Commercial Banks

Banks are an essential component in the economy in the process of creating economic growth in both developed and developing countries. In order to contribute to its commitment to promote growth, banks should be able to lock in on the stability of their financial performance. This study has examined the relationship of credit risk management on performance of Nepalese commercial banks. The descriptive, Correlational research design and review have been adopted for the study. The pooled data of ten commercial banks out of total population of twenty commercial banks operating up to January 2024 has been analyzed. The findings indicate that specific financial indicators, such as credit to deposit ratio, non-performing loan, and interest spread rate, play crucial roles in influencing ROA and ROE. Major issue on non-performing loan and impairment cost were highlighted. Identified that gross domestic product growth rate has an insignificant positive impact on profitability of commercial banks in Nepal. These insights contribute to a deeper understanding of the dynamics within the banking sector, offering valuable implications for stakeholders and policymakers.

Analisis Kredit Bermasalah pada Mandala Multifinance Tbk Karawang

Mandala Multifinance Tbk Karawang is a leasing company that helps customers in obtaining financing for capital needs. Therefore, any distribution of credit should be well monitored by the management of the company so that the credit is not abused. The study aims to analyze problematic credit and find out the application of the 5C principle in the granting of credit that affects the level of NPL (Non Performing Loan) on the Mandala Multifinance Tbk Karawang. The method applied uses qualitative data with a triangulation approach, which includes the collection of primary data through observations, interviews, and documentation. The Non-Performing Loan (NPL) financial ratio is used as a tool for analyzing data. The results of the research show that the application of the 5C principle in the distribution of credit in Mandala Multifinance Tbk Karawang is still ineffective because there are shortcomings in the analysis process carried out. The conclusion of this study is that the highest NPL ratio in 2021 is 4.35, while the lowest in 2020 is 3.32. The average NPL for the three years 2020-2022 was 3.74, marking a healthy category.