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Research Article
Impact of high non-performing loan ratios on bank lending trends and profitability
Eric Jing
Livingston High School
Corresponding Author
ORCiD: https://orcid.org/0000-0002-5593-5626
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This work is licensed under a CC BY 4.0 License. Read Full License
Declarations:
Declarations
- The author has confirmed that a statement listing potential conflicts of interest or lack thereof is included in the text.
The goal of this paper is to explore the relationship between the specific non-performing loan ratio (NPL ratio) and the corresponding impact on the bank’s profitability and lending behavior. It also seeks to investigate the macroeconomic impacts of economies with excessively high NPL ratios as well as the efficacy and impact of alleviation measures used by banks and governments around the world to help facilitate a decrease in high NPL ratios. The possible implications and effects of the COVID-19 pandemic on NPL ratios is also addressed in this paper. It is found that when excessively high NPL ratios go unaddressed, the economy tends to suffer. On the other hand, this study shows that when measures are taken to reduce or eliminate the high NPL ratios, economic performance improves, and the reduction has a clear positive impact on the economy.
Keywords
NPL Ratio, non-performing loans, economic recovery
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This is a preprint. It has not completed peer review.
Research Article
Impact of high non-performing loan ratios on bank lending trends and profitability
Eric Jing
Livingston High School
Corresponding Author
ORCiD: https://orcid.org/0000-0002-5593-5626
Badges
Prescreen
This manuscript passed our Prescreen assessment
Complete author information
Appropriate declaration statements
Potential risks to human health
Prescreen
History
CURRENT STATUS: Posted
Version 1
Posted 12 Aug, 2020
No community comments so far
Metrics
Comments: 0
PDF Downloads: ...
HTML Views: ...
Subject Areas
International Economics
License:
This work is licensed under a CC BY 4.0 License. Read Full License
Declarations:
Declarations
- The author has confirmed that a statement listing potential conflicts of interest or lack thereof is included in the text.
The goal of this paper is to explore the relationship between the specific non-performing loan ratio (NPL ratio) and the corresponding impact on the bank’s profitability and lending behavior. It also seeks to investigate the macroeconomic impacts of economies with excessively high NPL ratios as well as the efficacy and impact of alleviation measures used by banks and governments around the world to help facilitate a decrease in high NPL ratios. The possible implications and effects of the COVID-19 pandemic on NPL ratios is also addressed in this paper. It is found that when excessively high NPL ratios go unaddressed, the economy tends to suffer. On the other hand, this study shows that when measures are taken to reduce or eliminate the high NPL ratios, economic performance improves, and the reduction has a clear positive impact on the economy.
Figure 1
Figure 2
Figure 3
Figure 4
Figure 5
Figure 6
Due to technical limitations, full-text HTML conversion of this manuscript could not be completed. However, the manuscript can be downloaded and accessed as a PDF.