Collision of NPLs on the Financial Performance of Commercial Banks: A Case Study of Ethiopia
Keywords:
Commercial Banks, Effects, Ethiopia, Financial Performance, NPLs.
Abstract
Credit risk in banking relates to the possibility that loans will not be paid or that investments will deteriorate in quality or go in to default with resultant loss to the bank. This is the most obvious and most important risk to the banking industry in terms of potential losses. Credit risk is not confined to the risk that borrowers are unable to pay; it also includes the risk of payments being delayed, which can also cause problems for the bank. In order to protect their own interest and the wealth of bank depositors, banks need to investigate and monitor the activities of the will be and existing borrowers. Adequately managing of those risks related with credit is critical for the survival and growth of any financial institution. The present case study projects the effects of Non-Performing Assets on the Financial Performance of Commercial Banks in Ethiopia.
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Gestel & Baesens, 2008 Factors affecting Non-performing loans in Taiwan
Heffernan, S., 1996. Modern banking in theory and practice. Chichester: John Wiley and Sons. International Journal of Management & Sustainability,2014,3(5): 295-306
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Afriyie & Akotey, 2012 Credit risk management & profitability of selected rural banks.
Altunbas, Y., 2005. Mergers and acquisitions and bank performance in Europe – The role of strategic similarities. European central bank, Working Paper Size Series, No. 398.
Anthony, M.C., 1997. Commercial bank risk management; an analysis of the process. The Wharton school. University of Pennsylvania. Financial Institutions Centers.
Asari (2011) Determinants of Non-performin loans evidence from commercial banks of Ethiopia.
Athanasoglou, P., S.N. Brissimis and M.D. Delis, 2005. Bank-specific, industry specific and macroeconomic determinants of bank profitability. MPRA Paper No. 153.
A. V. Vedpuriswar, 2009 Credit risk management & profitability of Commercial Banks in Ethiopia.
Awoyemi Samuel Olausi,Banks ( 2014 ) the impact of credit risk management on the banks of Nigeria.
Basel Committee on Banking Supervision, 1982. Management of banks’ international lending, country risk analysis and country exposure measurement and control. Available from www.bis.org.
B. Ravi Kumar, “Financial Performance Evaluation – A Case Study of Bharat Heavy Electricals Limited,” EPRA International Journal of Economic and Business Review, EISSN: 2347 – 9671, pp. 207 – 211, Vol. 3, Issue. 11, November - 2015, published by EPRA Trust – Tiruchirappalli.
Basel Committee on Banking Supervision, 1999. Principles for the management of credit Risk, CH – 4002 basel, Switzerland Bank for International Settlements.
Basel Committee on Banking Supervision, 2001. Risk management practices and regulatory capital: Cross-sectional comparison. Basel Committee on Banking Supervision. Available from www.bis.org.
B. Ravi Kumar et. al. “Empirical Analysis on Financial Performance through Cash Flow Statements,” International Journal of Accounting & Finance Review, PISSN: 2576 – 1285, EISSN: 2576 – 1293, pp. 1 – 12, Vol. 3, No. 1, September – 2018, published by Centre for Research on Islamic Banking & Finance and Business – USA.
Basel Committee on Banking Supervision, 2006. Studies on credit risk concentration, an overview of the issues and a synopsis of the results from the research task force project. Available from www.bis.org.
B. Ravi Kumar et. al.“Genesis for Increase of NPAs in Indian Banks,” Journal of Banking and Finance Management, pp. 1 – 8, Volume 1, Issue 1, July – 2018, published by Sryahwa Publications – USA.
Bessis, J., 2002. Risk management in banking. John Wiley & Sons.
Bobakovia, I.V., 2003. Raising the profitability of commercial banks, BIATEC, Retrieved on April, 2005, 11. Available from http/www/nbs.SK/BIATEC/.
Bourke, P., 1989. Concentration and other determinants of bank profitability in Europe, North America and Australia. Journal of Banking and Finance, 13(1): 65–79.
Brownbrigde, M, 1998. The causes of financial distress in local banks in Africa and implications for prudential policy, UNCTAD OSG/DP/132.
Boudriga, Taktak& Jellouli (2009), Determinants of non-performing loans in licensed Commercial Banks evidence from sri lanka.
B. Ravi Kumar et.al. “Non Performing Assets in Public Sector Banks: A Cause Analysis,” American Finance & Banking Review, PISSN: 2576 – 1226, EISSN: 2576 – 1234, pp. 14 – 19, Vol. 2, No. 2, September – 2018, published by Centre for Research on Islamic Banking & Finance and Business – USA.
Choudhry, 2011, Relation between collateralizing loans & occurance on non-performing loans.
DeYoung, R. and G. Whalen, 1994. Banking industry consolidation: Efficiency issues, Working Paper No. 110. A Conference of the Jerome Levy Economics Institute, Office of the Comptroller of the Currency, Washington, DC.
Eastern Caribbean Central Bank, 2009 Factors affecting Non-performing loans in Ethiopian banks.
Felix, A.T. and T.N. Claudine, 2008. Bank performance and credit risk management, Available from http//www.essays.se/essay/55d5c0bd4/.
Gestel & Baesens, 2008 Factors affecting Non-performing loans in Taiwan
Heffernan, S., 1996. Modern banking in theory and practice. Chichester: John Wiley and Sons. International Journal of Management & Sustainability,2014,3(5): 295-306
Ismaila, 2011 Determinants of non-performing loans
Kauko, 2012, p.196 External deficits & non-performing loans in the recent financial crisis
Published
2019-01-19
How to Cite
Tola, H. M., & Sankar, D. G. (2019). Collision of NPLs on the Financial Performance of Commercial Banks: A Case Study of Ethiopia. Asian Finance & Banking Review, 3(1), 1-11. https://doi.org/10.46281/asfbr.v3i1.230
Section
Research Paper/Theoretical Paper/Review Paper/Short Communication Paper
Copyright (c) 2019 Hailu Megersa Tola ,D. Guna Sankar
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