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Subject: search.filters.subject.Credit risk

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    Credit Risk Management and Financial Performance in Listed Financial Institutions in Sri Lanka
    (4th International Conference for Accounting Researchers and Educators, Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2018) Kumudumali, H.H.E.; Wijesinghe, K.D.G.N.
    Financial Institutions are exposed to different types of risks, which effect the performance and activity of these financial institutions. Credit risk is one of the most significant risks that financial institutions face, considering that granting credit is one of the main sources of income in financial institutions. The main purpose of this study is to investigate the impact of credit risk management on financial performance in finance institutions. The study considered ROA (Return on Asset) as profitability indicator while Non- Performing Loan Ratio (NPLR), Total Loans to the Asset ratio, Capital Adequacy Ratio (CAR) are considered as credit risk management indicators. The study used secondary data of 30 financial institutions covering the period of 2012 to 2017. Data were analyzed using panel data analysis through E-Views packages. The result reveals that overall credit risk has significant impact on profitability of listed financial institutions
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    The Relationship between Credit Risk and Bank Performance: A Study of Commercial Banks in Sri Lanka
    (Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2016) Madushani, B.D.A.; Madurapperuma, M.W.
    Credit risk is the most important part of all commercial banks performing their works around the world. The objective of this study is to identify the relationship between credit risk and commercial banks performance in Sri Lanka. This study based on secondary data and data were obtained from various sources such as selected commercial banks annual reports, relevant articles, books and magazines etc. The panel data of a ten year period from 2006 to 2015 from the selected ten banks were used to examine the relationship between credit risk and commercial banks performance. Furthermore, Return on Assets (ROA) used as a profitability indicator while Non-Performing Loan to Total Loan Ratio (NPLR), Capital Adequacy Ratio (CAR) and Total Loan to Deposits Ratio (LTDR) used as credit risk indicators. The correlation and regression analysis was used to examine the relationship between credit risk and profitability indicators during the period and study by using E-views software. According to the empirical results, it was observed that NPLR and CAR has negative significant relationship with the commercial banks profitability and LTDR has positive significant relationship with the commercial banks profitability. Then this study concluded the credit risk has a significant relationship with the bank profitability. Therefore, this study recommended the banks to implement an effective tools and techniques to reduce the credit risk of commercial banks in Sri Lanka.
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    The Impact of Credit Risk on Bank Profitability: With Special Reference to Sri Lankan Licensed Commercial Banks in Sri Lanka
    (Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2016) Sampath, M.G.I.; Aruppla, W.D.N.
    Lending is one of the main incomes generating activity in commercial banks. Credit risk occurs in connection with lending. Among the different risks facing by banks risks, credit risk is considered as one of the major determinant of bank profitability because of the number and diversity of stakeholders affected. The objective of the study is to assess the impact of credit risk on profitability of licensed commercial banks in Sri Lanka for the period 2011 to 2015. Fifteen commercial banks were selected for the study and data was collected through published annual reports and using Eview Statistic Software & SPSS Software was performed Descriptive analysis, Correlation and Regression analysis. This study found that non-performing loan (NPL) ratio has a significant impact on Return on Assets (ROA) ratio, while total loan to total deposit (TLTD) ratio has no significant impact on Return on Assets (ROA) ratio. Furthermore, non-performing loan (NPL) ratio has significant positive impact on Return on Equity (ROE) ratio, while total loan to total deposit (TLTD) ratio has significant negative impact on Return on Equity (ROE) ratio. Findings of this study contribute to formulate efficient and effective credit risk management control policies for licensed commercial banks in Sri Lanka.