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Credit Risk And Profitability In Banking Sector In Bosnia And Herzegovina

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  • Igor Živko
  • Josipa Grbavac
  • Anela Čolak

Abstract

Financial system of Bosnia and Herzegovina is bank-based system. There are twenty-eight banks in banking sector. Loans dominate in bank's assets and there is source for bank profitability. Authors in this paper will analyse credit risk expose of banks measured with non-performing loans ratio (NPL) in period 2005-2016. Changes in economic environment have impact on banks’ credit risk. First aim of this paper is to test correlation between changes in economic present measured by indicators (GDP, inflation, and monetary aggregates) and non-performing loans. Second aim, is to test correlation between non-performing loans and profitability in banking sector.

Suggested Citation

  • Igor Živko & Josipa Grbavac & Anela Čolak, 2018. "Credit Risk And Profitability In Banking Sector In Bosnia And Herzegovina," Economy & Business Journal, International Scientific Publications, Bulgaria, vol. 12(1), pages 376-384.
    • Handle: RePEc:isp:journl:v:12:y:2018:i:1:p:376-384
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    References listed on IDEAS

    as
    1. Foos, Daniel & Norden, Lars & Weber, Martin, 2010. "Loan growth and riskiness of banks," Journal of Banking & Finance, Elsevier, vol. 34(12), pages 2929-2940, December.
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    More about this item

    Keywords

    bank; gdp; npl; profitability; bosnia and herzegovina;
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    JEL classification:

    • A - General Economics and Teaching

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