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Bank-specific and Macroeconomic Determinants of the Quality of Bank Loans Portfolio in Romania and Bulgaria

Author

Listed:
  • Roman Angela

    (“Alexandru Ioan Cuza” University of Iasi)

  • Bilan Irina

    (“Alexandru Ioan Cuza” University of Iasi)

Abstract

The aim of our paper is to empirically investigate the determinants of the quality of bank loans portfolio for a panel of 29 commercial banks from two new EU Member States, namely Bulgaria and Romania, over the period 2003-2012. Our study is based on annual data coming from Bankscope Database, commercial banks’ annual reports, Eurostat and World Bank’s Global Financial Development Databases. The results of our study show that the dynamics of bank loans quality, expressed by the ratio of non-performing loans to total loans, is significantly influenced by both macroeconomic factors (the GDP growth rate, the unemployment rate and the inflation rate) and some bank-specific factors (the return on average total assets and the size of the bank). The added value of our study comes from providing evidence regarding the main factors that could influence the quality of bank loans portfolio in Bulgaria and Romania.

Suggested Citation

  • Roman Angela & Bilan Irina, 2015. "Bank-specific and Macroeconomic Determinants of the Quality of Bank Loans Portfolio in Romania and Bulgaria," Ovidius University Annals, Economic Sciences Series, Ovidius University of Constantza, Faculty of Economic Sciences, vol. 0(1), pages 881-886, May.
    • Handle: RePEc:ovi:oviste:v:xv:y:2015:i:1:p:881-886
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    Citations

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    Cited by:

    1. Petros Golitsis & Athanasios P. Fassas & Anna Lyutakova, 2019. "Credit Risk Determinants: Evidence from the Bulgarian Banking System," Bulletin of Applied Economics, Risk Market Journals, vol. 6(1), pages 41-64.

    More about this item

    Keywords

    non-performing loans; commercial banks; bank-specific variables; macroeconomic variables;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • G01 - Financial Economics - - General - - - Financial Crises
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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