Impact of Non-performing assets on the commercial banking industry: Survey evidence recommendations for practitioners

Jamal M. Shamieh () and Ghada S. Albandak ()

International Journal of Innovative Research and Scientific Studies, 2025, vol. 8, issue 6, 3402-3416

Abstract: The purpose of this research study is to investigate the impact of non-performing assets on the profitability of commercial banks. The study adopts a quantitative research design where data was collected through questionnaires and analyzed using statistical methods, descriptive and inferential. The findings reveal that non-performing assets have a statistically significant impact on the profitability of commercial banks drawn from the Middle East (ME). When banks experience less loan defaults, reduced overdue credit card payments, decreased unpaid business loans, and minimal non-payment of interest or principal; they report increased profits. This study offers practical solutions to reduce non-performing assets through survey evidence recommendations for practitioners in order to increase profitability. Further it offers practical solutions for reducing non-performing assets in various areas in the banking industry. Although other studies identified the major Non-performing loans, a type of NPA (NPL) impacts, this study focuses on how to deal with non-performing assets in order to increase profitability.

Keywords: Commercial banks; Middle East; Non-performing asset (NPAs); Non-performing assets; Profitability; Banking industry. (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:aac:ijirss:v:8:y:2025:i:6:p:3402-3416:id:10361

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