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A Segmentation Study of Non-Performing Loans Rates in Turkish Credit Market

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  • Metin Vatansever
  • Ibrahim Demir

Abstract

Non-performing loans (NPLs) rate is one of the main risks in commercial banks and is also a critical measure of the bank’s financial performance and stability. Banks meet the growth rate of NPLs when the debtors are not able to meet their financial obligations in terms of repayment of loans. Regional diversification can impact NPLs rate as well as macroeconomic and bank-specific factors. The purpose of this study is to detect homogeneous credit risk groups by geographical locations. Diversification across regions can help banks and financial institutions to determine appropriate market areas and identify effective diversified investment strategies by reducing the overall risk of the credit portfolios.

Suggested Citation

  • Metin Vatansever & Ibrahim Demir, 2017. "A Segmentation Study of Non-Performing Loans Rates in Turkish Credit Market," International Business Research, Canadian Center of Science and Education, vol. 10(11), pages 29-41, November.
    • Handle: RePEc:ibn:ibrjnl:v:10:y:2017:i:11:p:29-41
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    time series clustering; Turkey; credit market; non-performing loans rate;
    All these keywords.

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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