Non-Performing Loans Resolution as Essential Factor of Banking Sector Stability

Mirković, Vladimir; Knežević, Marija; Čekerevac, Zoran

doi:10.12709/fbim.02.02.02.22

Cited by 4 publications

(5 citation statements)

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“…The following facts about NPLs and their global prevalence in banking systems should be taken into consideration. In addition to the previously discussed issues of the lack of a specific definition and the need for a standardized strategy when it comes to NPLs (Mirković & Knežević, 2014), most countries used the IMF's definition of NPLs (IMF, 2005). The National Bank of Serbia adopted a definition of NPLs that is like the IMF's definition (National Bank of Serbia, 2019), with the most important aspect being the 90-day or longer past due degree.…”

Section: Review Of Npls Trend In the Banking Industrymentioning

confidence: 99%

Measuring banking system resilience by using the Texas ratio

Mirković,

Iliev-Matić,

Dudić

2024

EurJ Appl Econ

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The issue of banking sector resilience is one of the most exploited after the global financial crisis. Competent authorities and central banks worldwide conducted a series of actions to strengthen their systems and made them more resilient to extraordinary events. For that purpose, there were conducted stress tests leading to results for the improvement of the central bank's supervisory activities and practices. Also, the analysis of banking sector resilience should be complemented with other measures, which are also treated as early warning indicators. Texas ratio is one of the early warning indicators that could indicate the banking system's stability through the analysis of non-performing loans as a portion of "toxic" assets in banks. A high percentage of non-performing loans poses a serious threat to banking institutions' ability to survive, hence it is crucial to monitor them and find effective solutions. The authors of the research stress the importance of using the Texas ratio when evaluating the resilience of the banking industry. The main findings of the paper are reflected in a positive correlation between NPL and Texas ratio and recommendation for Texas ratio's widespread usage in practice.

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Section: Review Of Npls Trend In the Banking Industrymentioning

confidence: 99%

Measuring banking system resilience by using the Texas ratio

Mirković,

Iliev-Matić,

Dudić

2024

EurJ Appl Econ

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“…When it comes about NPLs and their presence worldwide among banking systems, there should be considered certain facts that follows. Beside already elaborated problem of unique definition absence and necessity for harmonized approach regarding NPLs (Barisitz, 2011;Mirković & Knežević, 2014a), most of the countries applied the NPLs definition given by IMF (IMF, 2005). National bank of Serbia applied the definition of NPLs that is very similar to above mentioned IMF's definition (National bank of Serbia, 2019) with the key criterion described in threshold of 90 days or more past due.…”

Section: Review Of Npls Trend In the Banking Industrymentioning

confidence: 99%

“…National bank of Serbia applied the definition of NPLs that is very similar to above mentioned IMF's definition (National bank of Serbia, 2019) with the key criterion described in threshold of 90 days or more past due. Furthermore, European Banking Authority (hereinafter: EBA) introduced non-performing and forbearance exposures in the document "Final draft Implementing Technical Standards on supervisory reporting on forbearance and non-performing exposures" (EBA, 2014) accompanied by the differentiation between transaction and debtor approach implementation and rules for determination of priorities between two of them (Mirković & Knežević, 2014b).…”

Section: Review Of Npls Trend In the Banking Industrymentioning

confidence: 99%

Measuring of banking system resilience by using the texas ratio

Mirković,

Iliev Matić,

Dudić

2023

Proceedings of the 10th International Scientific Conference - FINIZ 2023

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The issue of banking sector resilience is one of the most exploited after global financial crisis. Competent authorities and central banks worldwide conducted series of actions to strengthen their systems and made it more resilient on extraordinary events. For that purpose, there were conducted stress tests leading to results for improvement of central bank's supervisory activities and practices. Also, the analysis of banking sector resilience should be complemented with other measures, which are also treated as early warning indicators. Texas ratio is one of the early warning indicators that could indicate the banking system stability through the analysis of non-performing loans as portion of "toxic" assets in banks. High level of non-performing loans represents a huge threat for survival of banking systems, so their monitoring and efficient resolution is imperative. In paper, authors emphasize the significance of Texas ratio usage in the process of banking sector resilience evaluation.

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“…In 1988, the international risk-based capital standard was set in the form of an agreement known as Basel I, and later, the 2004, Basel II Accord as well as the 2010 Basel III Accord, regulating and improving the risk management process to adequately cover all risks with capital (Basel Committee for Banking Supervision, 2010). The increase in the amount of non-performing loans (NPL) in the bank's assets requires an increase in provisions for potential losses in the future, which reduces the amount available for lending and directly affects the bank's financial results (Mirković and Knežević, 2014). This paper will analyze the relationship between the increase in non-performing loans and the bank's business results and competitiveness on the example of the OTP banking group.…”

Section: Introductionmentioning

confidence: 99%

THE IMPACT OF PROBLEMATIC LOANS ON THE BANKING COMPETITIVENESS – case study of OTP group

Đuranović¹,

Filipović²

2022

Proceedings of the International Conference "Economic and Business Trends Shaping the Future"

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Credit risk as a risk in basic, traditional, and most important banking business – the bank loan, is one of the biggest financial risks, considering that borrowers (debtors) defaults, directly affect the bank’s financial result and capital, and thus its competitiveness in the market. The impact of problematic loans on banking operations will be discussed for 2019-2021 on the example of OTP banking Group operating in 11 countries, to find out if there is a relation between NPL volume and the banking competitiveness. A comparative analysis method has been applied, comparing the profit, the NPL rate and the market position within the banking sector of the country to which each Group member belongs. Results has shown that the reduction in the volume of non-performing loans affected the increase in the competitiveness of banks, as well as that member banks located in European Union countries have a lower percentage of non-performing loans in relation to the member banks of the group operating in countries outside the European Union. The reduction of the percentage of bad loans is certainly in harmonization with the regulations of the European Union, but also in their better implementation.

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Non-Performing Loans Resolution as Essential Factor of Banking Sector Stability

Cited by 4 publications

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Measuring banking system resilience by using the Texas ratio

Measuring banking system resilience by using the Texas ratio

Measuring of banking system resilience by using the texas ratio

THE IMPACT OF PROBLEMATIC LOANS ON THE BANKING COMPETITIVENESS – case study of OTP group

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