Non-Performing Loans – Determinants, the Development over Time and the Impact on Banks and the Real Economy
| Author: | Bc. Kateřina Kafková |
|---|---|
| Year: | 2020 - summer |
| Leaders: | Mgr. Magda Pečená Ph.D. |
| Consultants: | |
| Work type: | Bachelors |
| Language: | English |
| Pages: | 70 |
| Awards and prizes: | |
| Link: | https://is.cuni.cz/webapps/zzp/detail/213876/ |
| Abstract: | This thesis explains the concept of non-performing loans (NPL) and analyses factors determining the share of NPLs in total gross loans provided in the Czech Republic. A panel of 24 banks operating in the Czech Republic with annual data from 2010-2019 is analysed. The main estimation method that is used is the difference Generalized Method of Moments. The possible determinants that are examined come from both macroeconomic and banking environment. The results of the estimation provide evidence of the existence of a connection between the NPL ratio and the macroeconomic factors, of which the effect of inflation and unemployment was the most significant. Also, the estimation confirms that the NPL ratio is significantly influenced by the bank-specific determinants, specifically by the effect of the previous values of the NPL ratio and the effect of credit growth. Finally, the thesis discusses the reversed effect – the effect of NPLs on the real economy. |
