CREDIT RISK AND PROFITABILITY IN BANKING SECTOR IN BOSNIA AND HERZEGOVINA

Igor Živko, Josipa Grbavac and Anela Čolak

Economy & Business Journal, 2018, vol. 12, issue 1, 376-384

Abstract: Financial system of Bosnia and Herzegovina is bank-based system. There are twenty-eight banks in banking sector. Loans dominate in bank's assets and there is source for bank profitability. Authors in this paper will analyse credit risk expose of banks measured with non-performing loans ratio (NPL) in period 2005-2016. Changes in economic environment have impact on banks’ credit risk. First aim of this paper is to test correlation between changes in economic present measured by indicators (GDP, inflation, and monetary aggregates) and non-performing loans. Second aim, is to test correlation between non-performing loans and profitability in banking sector.

Keywords: bank; gdp; npl; profitability; bosnia and herzegovina (search for similar items in EconPapers)
JEL-codes: A (search for similar items in EconPapers)
Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:isp:journl:v:12:y:2018:i:1:p:376-384

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