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Determinants of Non-Performing Loans: Evidence from Europe

Author

Listed:
  • Antonio Salvi
  • Candida Bussoli
  • Lavinia Conca
  • Marisa Gigante

Abstract

The issue of banks’ loan quality has assumed growing importance at the international level. This study aims to tackle the issue and to verify the impact of bank-specific determinants and macroeconomic indicators on banks’ loan quality. The analysis is conducted on a sample of 2,816 European banks over the period 2011-2015 through a multivariate regression with panel data. The main evidence shows that a higher return on average assets and a greater soundness of the bank can be associated with a better loan quality. Furthermore, the results also demonstrate that system conditions can contribute to determining banks’ asset quality. Adverse cyclical conditions, resulting from a lower GDP growth and a higher unemployment rate, can generate a lower loan quality.

Suggested Citation

  • Antonio Salvi & Candida Bussoli & Lavinia Conca & Marisa Gigante, 2021. "Determinants of Non-Performing Loans: Evidence from Europe," International Journal of Business and Management, Canadian Center of Science and Education, vol. 13(10), pages 230-230, July.
    • Handle: RePEc:ibn:ijbmjn:v:13:y:2021:i:10:p:230
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    References listed on IDEAS

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    JEL classification:

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

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