ANALYSIS OF THE INFLUENCE OF NON-PERFORMING LOANS ON BANKING PERFORMANCE. CASE STUDY ON THE EXAMPLE OF THE ROMANIAN BANKING SYSTEM

Dumitru Mihai Nedelescu () and Oana Ciulei ()
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Dumitru Mihai Nedelescu: Romanian-American University

Journal of Information Systems & Operations Management, 2022, vol. 16, issue 2, 184-195

Abstract: In the current period, bank loans constitute an important component of the financial- banking systems, both at national and international level, with major implications in economic and social life, as a result of the fact that all economies are deeply concerned with ensuring a sustainable economic development and reducing the negative effects generated by the pandemic on the financial market. This study aims to analyze the relationship of variable NPL with Return on Equity (ROE), Return on Assets (ROA) and Solvency Ratio (SR). We used three linear regressions in order to analyze the influence of NPL on each of the dependent variables mentioned above. The population is represented by quarterly financial indicators reported by National Bank of Romania for the period September 2014 - June 2022. The results of this study indicate that NPL have a negative effect on financial performance (ROE), profitability (ROA) and solvency (SR).

Date: 2022
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