Non-Performing Loan Determinants and Impact of COVID-19: Case of Bosnia and Herzegovina

Amila Žunić (), Kemal Kozarić () and Emina Žunić Dželihodžić ()
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Amila Žunić: School of Economics and Business, Sarajevo, Bosnia and Herzegovina
Kemal Kozarić: School of Economics and Business, Sarajevo, Bosnia and Herzegovina
Emina Žunić Dželihodžić: Central Bank of Bosnia and Herzegovina, Sarajevo, Bosnia and Herzegovina

Journal of Central Banking Theory and Practice, 2021, vol. 10, issue 3, 5-22

Abstract: The aim of this paper is to investigate the determinants of the movement of non-performing loans in the banking sector of Bosnia and Herzegovina, as well as the impact of the COVID-19 pandemic on them. For this purpose, secondary data from the banking sector of BiH were used, over which a multi-regression analysis was performed. The variables non-performing loans, GDP, loan loss provision, and dummy variable COVID-19 were used in the analysis. The results of the analysis showed a significant influence of all three mentioned variables. The existence of a significant positive link between non-performing loans and the state of the country's economy has been proven. In addition to the above, it has been proven that the variable COVID-19 has a delayed effect on NPLs, due to the current application of the moratorium on loans.

Keywords: NPLs; GDP; COVID-19; loan loss provision. (search for similar items in EconPapers)
JEL-codes: G00 G21 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:cbk:journl:v:10:y:2021:i:3:p:5-22

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