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Determinants of Non-Performing Loans in Licensed Commercial Banks and Impact of Covid 19 on Nonperforming Loans: Evidence from Sri Lanka

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dc.contributor.author Weerakoon, K.W.H.M.Y.R.
dc.contributor.author Weerasinghe, W.D.J.D.
dc.date.accessioned 2023-04-24T05:27:32Z
dc.date.available 2023-04-24T05:27:32Z
dc.date.issued 2022
dc.identifier.citation Weerakoon, K.W.H.M.Y.R.; Weerasinghe, W.D.J.D. (2023), Determinants of Non-Performing Loans in Licensed Commercial Banks and Impact of Covid 19 on Nonperforming Loans: Evidence from Sri Lanka, 11th Students’ Research Symposium, Department of Finance, Faculty of Commerce and Management Studies, University of Kelaniya Sri Lanka. 59. en_US
dc.identifier.uri http://repository.kln.ac.lk/handle/123456789/26099
dc.description.abstract Purpose: The purpose of this study is to ascertain the determinants of the non-performing loans and identify the impact of COVID19 on non-performing loans in licensed commercial banks in Sri Lanka. Design/Methodology/Approach: The study employed panel data methodology to investigate the effect of bank specific and macroeconomic factors on non-performing loans. This study takes secondary/ quantitative data. Panel unit root test has been undertaken in order to test the stationary of the variables. Hausman test and Breusch-Pagan Lagrange multiplier test were used to select the appropriate model out of pooled, random and fixed effect. The research conducted for pre-pandemic period (2012-2019) and period with the pandemic (2012-2021) to identify the impact of COVID19 on non-performing loans using selected 20 licensed commercial banks. Findings: Findings revealed that return on assets and loan loss provision has a significant positive influence, while loan to assets ratio positively associated with non-performing loan and no significant impact in both periods. Bank size has a significant negative influence. Real GDP growth rate, unemployment rate and lending interest rate were highly significant in both periods. Contrary to literature, inflation rate has a positive insignificant relationship with nonperforming loans. Originality: The findings of the study which details the determinants of non-performing loans of licensed commercial banks in Sri Lanka is beneficial for different stakeholders. The findings of the study might be used as a directive input in developing regulatory standards regarding lending policies in banking sector in Sri Lanka. en_US
dc.publisher Faculty of Commerce and Management Studies, University of Kelaniya Sri Lanka en_US
dc.subject Non-Performing Loans, Licensed Commercial Banks, Bank-Specific Determinants, Macroeconomic Determinants, COVID19 en_US
dc.title Determinants of Non-Performing Loans in Licensed Commercial Banks and Impact of Covid 19 on Nonperforming Loans: Evidence from Sri Lanka en_US


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