The world economic crisis has to a great extent, affected the financial flow of business entities; the impact of the crisis has primarily affected the financial solvency of business entities. The effect of late payments caused by the financial crisis has also changed the bank portfolio structure of the banks involved in the financing in the corporate sector. The aim of this paper is to point out to what extent the effects of the crisis in the banking sector of one country impacted banks' portfolios, business stability and to identify sectors in which there was an increase of risk in loan offerings due to an increase in NPL. Moreover, the aim herein is to prove that regardless of banks' size, by assets, banks with fewer assets are not the only ones to suffer the consequences of the recession. Stress testing is used in this work to measure the impact of the effective NPL on the bank equity. Bank portfolio analysis performed according to the methodology described in this paper served to determine the effective NPL. As a result, the analysis shows the impact of NPL on the capital adequacy ratio of the banks. Summing up the results of individual analysis provides an overview of sectors which had an increase in risk, due to the financial crisis. The paper is organized as follows: The first part explains the NPL term in order to argue its significance in the analysis of the effects of the recession. The second part explains the methodology, i.e. the process of analysis and investigation, and in the third part presents the results that are interpreted to finally reach the conclusions and give suggestions for further research.
scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.