COVID CRISIS EFFECTS ON NON-PERFORMING LOANS IN THE ROMANIAN BANKING MARKET

Andreea Maura Bobiceanu () and Ioana Georgiana Fä‚rcaè˜ ()
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Andreea Maura Bobiceanu: BabeÈ™-Bolyai University, Postal Adress: Teodor Mihali Street, Nr. 58-60, Cluj-Napoca 400591, Romania
Ioana Georgiana Fä‚rcaè˜: BabeÈ™-Bolyai University, Postal Adress: Teodor Mihali Street, Nr. 58-60, Cluj-Napoca 400591, Romania

Review of Economic and Business Studies, 2022, issue 30, 25-37

Abstract: The Non-performing loans ratio (NPLs) is an important indicator of the financial stability of a certain financial institution. Therefore, it is crucial to analyze the possible determinants of NPLs ratio. We aim to investigate this issue, by analyzing the NPLs ratio in Romania during 2000-2022. We find that Covid crisis impacts negatively significantly NPLs ratio due to the implementation of stringent measures to the banking sector, but also to the relief measures offered to borrowers. We bring evidence that the economic environment can impact significantly NPLs ratio. The higher level of employment implies an increase in NPLs ratio. Other macroeconomic determinants of NPLs ratio are GDP growth and inflation. Further, our results show that there are also bank determinants of NPLs ratio such us Return on Assets (ROA) and Loan to Deposit ratio. These results remain robust when we employ total NPLS 90 days and NPLs growth rate as dependent variables.

Keywords: non-performing loans; banking market; credit risk; emerging markets; covid (search for similar items in EconPapers)
JEL-codes: G21 G28 (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:aic:revebs:y:2022:j:30:bobiceanua

DOI: 10.47743/rebs-2022-2-0002

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