Collision of NPLs on the Financial Performance of Commercial Banks: A Case Study of Ethiopia

  • Hailu Megersa Tola Dean, College of Business and Economics, Ambo University, Ethiopia
  • D. Guna Sankar Department of Accounting and Finance, Ambo University, 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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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. Retrieved from https://www.cribfb.com/journal/index.php/asfbr/article/view/230
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Articles