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Review of empirical literature: The relationship between bank credit risk management indicators and bank profitability indicators

Authors

Dr. Zamira Veizi

Rubric:Finance, money circulation and credit
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Annotation

The profitability of the banking sector has received more and more attention in recent years. Nowadays there is an extensive empirical literature which has examined the relationship between credit risk management and bank profitability. Most studies in this field have concluded that credit risk management is the main contributor to the profitability of commercial banks. But there are also studies that have proven that the impact of credit risk management on bank profitability is negligible. The purpose of this paper is to make a summary of the empirical studies that have been carried out by different researchers in different countries and an analysis will be made of the results that have been achieved from each study

Keywords

profitability indicators
non-performing loans
bank
credit risk
credit risk management indicators

References:

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  2. Kosmidou, K., Tanna, S., Pasiouras, F., (2005), "Determinants of profitability of UK domestic banks: panel evidence from the period 1995-2002". In: Proceedings of the 37th Annual Conference of the Money Macro and Finance (MMF) Research Group, Rethymno, Greece, September 1-3, 2005
  3. Ahmed, A.S., Takeda, C. and Shawn, T. (1998), "Bank Loan Loss Provision: A Reexamination of Capital Management and Signaling Effects", Working Paper, Department of Accounting, Syracuse University, 1-37
  4. Ruziqa, A. (2013) "The impact of credit and liquidity risk on bank financial performance: the case of Indonesian Conventional Bank with total asset above 10 trillion Rupiah". International Journal of Economic Policy in Emerging Economies, 6 (2), pp. 93--106
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  6. Ben-Naceur, S. and Omran, M. (2008), "The Effects of Bank Regulations, Competition and Financial Reforms on MENA Banks' Profitability", Economic Research Forum Working Paper No. 44
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  8. Felix, A.T and Claudine, T.N (2008), "Bank Performance and Credit Risk Management", Unpublished Masters Dissertation in Finance, University of Skovde
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  16. Abiola, I., & Olausi, A. S. (2014) "The Impact of Credit Risk Management on the Commercial Banks Performance in Nigeria". International Journal of Management and Sustainability, 3 (5): 295, 306.
  17. Noman et al 2015, "The Effect of Credit Risk on the Banking Profitability: A Case on Bangladesh"
  18. Kodithuwakku, 2015, "Impact of Credit Risk Management on the Performance of Commercial Banks in Sri Lanka"
  19. Gizaw et al 2015 "" The impact of credit risk on profitability performance of commercial banks in Ethiopia".
  20. Alshatti 2015 " The effect of credit risk management on financial performance of the Jordanian commercial banks"
  21. Bayyoud dhe Sayyad (2015), "The relationship between credit risk management and profitability between investment and commercial banks in Palestine "
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