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Non- Performing Loans In The Banking Systems Of Serbia, Croatia And Macedonia: Comparative Analysis

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  • Delova Jolevska, Evica
  • Andovski, Ilija

Abstract

The aim of this paper is to evaluate the level of NPL loans in banking systems of the three sample Balkan countries. The special attention is dedicated to the level of NPL loans and their ratio compare to total loans. The quality of credit portfolio is important determinant in future bank strategies, thereby it’s important for the economic development of the whole country. The NPL loans affect the economic development through the credit activity which influence on the consumption and the capital adequacy ratio which constrain the possibility of growth. Thus creating a spiral and higher NPL ratio create low economic growth and low growth creates further NPL portfolio. In this paper analysis will be focused to compare the data of quality of credit portfolio in Macedonia, Serbia and Croatia. The comparative analysis will outline the differences in the quality of the portfolios in sample countries as well as the reasons for the differences. The reasons for higher resilience of some banking systems portfolios compared to others can be used as a valuable tool for enhancing the stability of the banking systems. These three countries are chosen because they had high credit growth in the past until the financial crises, they were affected by the crisis in the same time and their banking systems are dominantly owned by foreign banks.

Suggested Citation

  • Delova Jolevska, Evica & Andovski, Ilija, . "Non- Performing Loans In The Banking Systems Of Serbia, Croatia And Macedonia: Comparative Analysis," Ekonomika, Journal for Economic Theory and Practice and Social Issues, Society of Economists Ekonomika, Nis, Serbia, vol. 61(01), pages 1-16.
    • Handle: RePEc:ags:sereko:200275
    DOI: 10.22004/ag.econ.200275
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    References listed on IDEAS

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    1. Mr. Raphael A Espinoza & Mr. Ananthakrishnan Prasad, 2010. "Nonperforming Loans in the GCC Banking System and their Macroeconomic Effects," IMF Working Papers 2010/224, International Monetary Fund.
    2. Louzis, Dimitrios P. & Vouldis, Angelos T. & Metaxas, Vasilios L., 2012. "Macroeconomic and bank-specific determinants of non-performing loans in Greece: A comparative study of mortgage, business and consumer loan portfolios," Journal of Banking & Finance, Elsevier, vol. 36(4), pages 1012-1027.
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    Cited by:

    1. Dorsaf Elbir Merhbene, 2021. "The relationship between non-performing loans, banking system stability and economic activity: The case of Tunisia," IHEID Working Papers 03-2021, Economics Section, The Graduate Institute of International Studies.
    2. Qazim Tmava & Ajtene Avdullahi & Bese Sadikaj, 2018. "Loan portfolio and nonperforming loans in Western Balkan Countries," International Journal of Finance & Banking Studies, Center for the Strategic Studies in Business and Finance, vol. 7(4), pages 10-20, October.
    3. Mile Bosnjak & Jurica Vukas & Ivan Sverko, 2021. "PREDICTING NPLs FOR CROATIA WITH MACROECONOMIC VARIABLES," Economic Thought and Practice, Department of Economics and Business, University of Dubrovnik, vol. 30(2), pages 571-586, december.
    4. Almir ALIHODŽIĆ & İbrahim Halil EKŞİ, 2018. "Credit growth and non-performing loans: evidence from Turkey and some Balkan countries," Eastern Journal of European Studies, Centre for European Studies, Alexandru Ioan Cuza University, vol. 9, pages 229-249, December.

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