Symposia & Conferences
Permanent URI for this communityhttp://repository.kln.ac.lk/handle/123456789/10216
Browse
2 results
Search Results
Item The Impact of Industry-Specific Factors on Non-Performing Loans: “Evidence from Licensed Banks and Finance Companies in Sri Lanka”(Department of Finance, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka., 2025) Sewwandi, B. S.; Dissanayake, D. M. U. H.Introduction: Diverse studies have been undertaken on different aspects of the industry and their respective impacts on the amount of non-performing loans in licensed banks and finance companies in Sri Lanka. These generalizations apply to every financial institution and concern both profitability and stability. These data will be considered based on quantitative measures that will cover a range of years from 2012 until 2023, which include gross amounts of loans as well as liquidity ratios, loans-to-deposit ratio, return on assets (ROA), size of the bank, and the level of capital adequacy ratio (CAR) as potential explanatory variables for NPL levels among the responding banks in the study. Methodology: The research relies on panel data analysis and regression models. Data was collected from the annual reports of 10 licensed banks and 5 licensed finance companies. The statistical techniques used included normality tests, correlation, regression analyses, and diagnostic checks (e.g., heteroskedasticity, and multicollinearity). Findings: Gross loans, liquidity ratios, and CAR have direct positive effects on NPLs as loan amounts and regulatory capital requirements increase, the risks get higher. In contrast, the loan-to-deposit ratio and ROA exhibit negative relationships with NPLs, which implies that improved profitability leads to fewer loan defaults. Thus, mixed results were given on bank size since larger institutions are linked to higher risks and operational complexity. Conclusion: The results highlight the necessity for fortified risk management, custom credit policies, and enhanced regulatory frameworks to mitigate NPLs. The research adds to the scant literature on dynamics in NPL in Sri Lanka and offers facts for policymakers and financial executives to consider.Item Impact of credit risk management on the performance of commercial banks in Sri Lanka(Department of Accountancy, University of Kelaniya, 2015) Kodithuwakku, S.The adoption of credit risk management is becoming a crucial factor for every commercial bank around the world. The objective of this study is to identify the impact of credit risk management on the performance of the commercial banks in Sri Lanka. This study is primarily based on both primary and secondary data. Primary data were collected from eight (08) commercial banks from 24 commercial banks in Sri Lanka. The sample was selected from the population based on the superior financial performance for the period under review and the availability of the consistent data over the set period. The primary data was collected mainly through an interview. The relevant authorities were interviewed personally in order to have their views on the problems and solutions. The secondary data were obtained from various sources such as Annual Reports of the selected commercial banks, relevant articles, books and magazines etc. The panel data of a five year period from 2009 to 2013 from the selected banks were used to examine the relationship between credit risk and performances. The Return on Assets (ROA) is used as performance indicator and Loan provision to Total (LP/TL), Loan Provision to Non-Performing Loans (LP/NPL), Loan Provision to Total Assets (LP/TA) and Non-Performing Loans/ Total Loans (NPL/TL) were used as indicators of credit risk. Further, a regression model was used to establish the relationship between amounts of loan as well as nonperforming loans and profitability during the period of study by using E-views software. The result shows that non-performing loans and provisions have an adverse impact on the profitability. Therefore, the study recommended the banks to implement an effective tools and techniques to reduce the credit risk management.