Article
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Determinants Of Non-performing Loans in Pakistan
Version 1
: Received: 27 July 2020 / Approved: 28 July 2020 / Online: 28 July 2020 (12:34:23 CEST)
How to cite: Islam, T.; Zafar, F.; Fatima, N.; Tahir, N. Determinants Of Non-performing Loans in Pakistan. Preprints 2020, 2020070682. https://doi.org/10.20944/preprints202007.0682.v1 Islam, T.; Zafar, F.; Fatima, N.; Tahir, N. Determinants Of Non-performing Loans in Pakistan. Preprints 2020, 2020070682. https://doi.org/10.20944/preprints202007.0682.v1
Abstract
Many countries have been facing the problem of bank insolvency across the globe. Asset deterioration is one of the main reasons for insolvency of banks. The objective of the paper is to ascertain the determinants of nonperforming loans (NPLs) in the banking sector of Pakistan for the period 2006-16. Other than the bank specific and macro variables proposed by the literature, the roles of weighted maturity and output gap are for the first time examined. We find significant impact of output gap on NPLs however weighted maturity has insignificant role in shaping the future NPLs. Bank specific drivers of NPLs include bank size and capital adequacy ratio.
Keywords
Business fluctuations; financial stability; output gap; weighted maturity
Subject
Business, Economics and Management, Economics
Copyright: This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
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