Examining Macroeconomic variables on Credit risk in the South African Banking System

Leonie Stiglingh () and Daniel Mokatsanyane ()
Additional contact information
Leonie Stiglingh: North West University
Daniel Mokatsanyane: North West University

Acta Universitatis Danubius. OEconomica, 2023, issue 19(6), 18-30

Abstract: Banks serve as foundational pillars in a nation's financial system, playing a critical role in providing liquidity within a market economy. Given their intrinsic significance and pivotal functions, banks inherently face a spectrum of risks. The primary Objective of this study was to employ quantitative research methods to scrutinize the correlation between credit risk and various macroeconomic variables. Building upon Prior Research validating the link between macroeconomic factors and credit risk, our Approach involved analyzing annual secondary macroeconomic and bankspecific data variables spanning from 2007 to 2022. The Results reveal a sustained relationship between credit risk and the examined macroeconomic variables over the long term. Notably, in the short term, only the GDP growth rate and exchange rate emerge as influencers of credit risk. The Implications of this study extend to banks, offering insights into comparative performance, and to academic researchers, providing a benchmark for their scholarly endeavors. Value by contributing to the existing body of knowledge on variables contributing to credit risk, this study underscores the significance of managing GDP and exchange rate as factors to mitigate credit risk.

Keywords: Non-performing loans; Credit risk; South African banks; GDP growth rate; exchange rate (search for similar items in EconPapers)
Date: 2023
References: Add references at CitEc
Citations:

Downloads: (external link)
https://dj.univ-danubius.ro/index.php/AUDOE/article/view/2580/2720 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:dug:actaec:y:2023:i:6:p:18-30

Access Statistics for this article

More articles in Acta Universitatis Danubius. OEconomica from Danubius University of Galati Contact information at EDIRC.
Bibliographic data for series maintained by Daniela Robu ().