Examining the Determinants of Credit Risk Management and Their Relationship with the Performance of Commercial Banks in Nepal

Bhatt, Tribhuwan Kumar; Ahmed, Naveed; Iqbal, Muhammad Babar; Ullah, Mehfooz

doi:10.3390/jrfm16040235

Cited by 11 publications

(8 citation statements)

References 97 publications

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“…The study from (Bhatt et al, 2023) the results of market risk analysis research have a significant effect on credit risk management. The results showed that credit risk management mediates the relationship between environmental risk, credit rating measurement, market risk analysis, and commercial bank performance.…”

Section: Resultsmentioning

confidence: 99%

Determinant Banking Credit Risk Management

Soehaditama,

Machdar,

Manurung

2023

IJBA

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This article reviews and looks for the relationship between two variables, namely banking and credit risk management from the results of existing research. The research method used is qualitative by looking at the findings or research results from existing literature derived from reputable journals or other sources found to support this study. In this article explains that banking credit risk management, determinants play an important role in identifying, measuring, and managing credit risk. Factors such as debtor characteristics, quality of collateral, economic and industrial conditions, bank policies and procedures, and legal and regulatory factors affect the level of credit risk. A deep understanding of these factors helps banks in taking better decisions and developing effective strategies in managing credit risk.

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Section: Resultsmentioning

confidence: 99%

Determinant Banking Credit Risk Management

Soehaditama,

Machdar,

Manurung

2023

IJBA

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“…Many uncertified risk management employees also contribute to weak credit risk identification and management processes. Tien and Nguyen (2023) state that good credit risk identification and management affect credit performance and help banks to control and reduce credit risk (Mburu et al, 2020;Akomeah et al, 2020;Bhatt et al, 2023). The policy of credit granting is good enough, except for the absence of a final risk grading system, if the implementation operates properly.…”

Section: Discussionmentioning

confidence: 99%

Implementation of credit risk management basel principles (Evaluation Study of an Indonesian Commercial Bank)

Sutono,

Hermawan

2024

Owner

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The study evaluated the implementation of credit risk management at Bank PQR based on the Basel Principles regarding Management of Credit Risk due to increasing Low-Quality Credit in the last six months. It adopted a case study approach at Bank PQR, one of Indonesia's commercial banks, in the Corporate Segment with total credit reaching 62% of the Bank PQR credit portfolio using a qualitative descriptive method by conducting document analysis and interviews to collect data. The study sample consists of 30 credit-granting proposals of Bank PQR. First, it evaluated the suitability of the Basel Principles with the regulation of the Financial Services Authority, then analyze Bank PQR document, conduct an interview and last evaluated implementation of credit risk management by providing a score of three if suitable and implemented well, two if suitable and not implemented well and one if not suitable. The result shows the implementation is not by the Basel Principles with a final score of 2.58 out of 3, and the main weakness being the inadequacy of the credit risk environment’s development. It recommends the Bank PQR to improve its credit risk environment, such as compliance with regulations, employee training, and implementing good internal controls.

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“…Therefore, investing in robust credit risk management to increase the likelihood of default avoidance is crucial for banks to successfully and safely maintain their financial position (Rakhaev, 2020). It is well-supported by research, and many studies have unfolded on how effective credit risk management is a function of bank performance (Bhatt et al, 2023).…”

Section: Introductionmentioning

confidence: 99%

Venturing into Risk Management: Examining Credit Risk and Performance in Pakistani Commercial Banks through Panel VAR Analysis from a Business Perspective

Ali,

Jameel Ahmed

2024

JEBV

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In Pakistan's dynamic financial sector, effective credit risk management by commercial banks is critical to maintaining financial stability. In this study, we embarked on a unique and comprehensive journey, adopting the Panel Vector Autoregressive (PVAR) analysis, a novel methodology in this context. This approach allowed us to delve into the intricate relationship between credit risk management strategies and the aggregate business performance of commercial banks. The data used in this study spans from 2010Q1 to 2022Q4, investigating the comprehensive nexus of credit risk and macroeconomic indicators using a large dataset encompassing 18 strategically critical commercial banks of Pakistan. Our study uncovers several profound insights, documenting a remarkable increase in credit risk upon increases in the interest rate. The repercussions of the non-performing loans are observed nearly two years after the successive phases of a stern posture of monetary policy have been implemented. Our research findings carry significant weight for the banking industry. We discovered that the levels of credit risk could be reined in due to the protective shield offered by phases of sudden economic booms. This underscores the reinforcing effect of the improving economic conditions on defaults of loans, providing practical and actionable insights for credit risk management strategies.

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Examining the Determinants of Credit Risk Management and Their Relationship with the Performance of Commercial Banks in Nepal

Cited by 11 publications

References 97 publications

Determinant Banking Credit Risk Management

Determinant Banking Credit Risk Management

Implementation of credit risk management basel principles (Evaluation Study of an Indonesian Commercial Bank)

Venturing into Risk Management: Examining Credit Risk and Performance in Pakistani Commercial Banks through Panel VAR Analysis from a Business Perspective

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