Impact of Credit Risk Management Systems on the Financial Performance of Commercial Banks in Uganda

Kód výsledku v IS VaVaI

<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F62156489%3A43110%2F18%3A43914780" target="_blank" >RIV/62156489:43110/18:43914780 - isvavai.cz</a>

Výsledek na webu

<a href="https://doi.org/10.11118/actaun201866061627" target="_blank" >https://doi.org/10.11118/actaun201866061627</a>

DOI - Digital Object Identifier

<a href="http://dx.doi.org/10.11118/actaun201866061627" target="_blank" >10.11118/actaun201866061627</a>

Jazyk výsledku

angličtina

Název v původním jazyce

Impact of Credit Risk Management Systems on the Financial Performance of Commercial Banks in Uganda

Popis výsledku v původním jazyce

The paper is set to analyse the impact of credit risk management on the financial performance of commercial banks in Uganda for a period of 2006-2015 using panel data for a sample of 20 commercial banks. The study employs return on assets as a dependent variable and non-performing loans, growth in interest earnings and loan loss provisions to total loans as credit risk measures. Secondary data is sourced from the Bank scope database, African development bank and the central bank of Uganda. The study employs descriptive statistics, regressions and correlation analysis. Regression models are to estimate the magnitude of significance of credit risk management on the performance of commercial banks in Uganda. The study revealed that credit risk management impacts on the performance of Ugandan commercial banks. The results portrayed that banks&apos; performance was inversely influenced by non-performing loans which may expose them to large magnitudes of illiquidity and financial crisis. Thus given such results, the researcher recommends that banks need to enhance their credit risk management techniques not only to earn more profits but also to maintain a qualitative asset portfolio and attention be given to non-performing loans, loan loss provision to total loans and growth in interest earnings that were found to be significant. Banks need to design appropriate credit policies that must handle all necessary conditions before advancing credit to their customers and also develop strong credit administration committees and teams that must conduct appropriate and sound loan appraisal evaluations and which must also monitor the loans throughout the required processes right from extending a loan to a customer up to the completion of loan repayments so as to mitigate credit risks.

Název v anglickém jazyce

Impact of Credit Risk Management Systems on the Financial Performance of Commercial Banks in Uganda

Popis výsledku anglicky

The paper is set to analyse the impact of credit risk management on the financial performance of commercial banks in Uganda for a period of 2006-2015 using panel data for a sample of 20 commercial banks. The study employs return on assets as a dependent variable and non-performing loans, growth in interest earnings and loan loss provisions to total loans as credit risk measures. Secondary data is sourced from the Bank scope database, African development bank and the central bank of Uganda. The study employs descriptive statistics, regressions and correlation analysis. Regression models are to estimate the magnitude of significance of credit risk management on the performance of commercial banks in Uganda. The study revealed that credit risk management impacts on the performance of Ugandan commercial banks. The results portrayed that banks&apos; performance was inversely influenced by non-performing loans which may expose them to large magnitudes of illiquidity and financial crisis. Thus given such results, the researcher recommends that banks need to enhance their credit risk management techniques not only to earn more profits but also to maintain a qualitative asset portfolio and attention be given to non-performing loans, loan loss provision to total loans and growth in interest earnings that were found to be significant. Banks need to design appropriate credit policies that must handle all necessary conditions before advancing credit to their customers and also develop strong credit administration committees and teams that must conduct appropriate and sound loan appraisal evaluations and which must also monitor the loans throughout the required processes right from extending a loan to a customer up to the completion of loan repayments so as to mitigate credit risks.

Druh

J_SC - Článek v periodiku v databázi SCOPUS

CEP obor

—

OECD FORD obor

50206 - Finance

Projekt

—

Návaznosti

S - Specificky vyzkum na vysokych skolach

Rok uplatnění

2018

Kód důvěrnosti údajů

S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

Název periodika

Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis

ISSN

1211-8516

e-ISSN

—

Svazek periodika

66

Číslo periodika v rámci svazku

6

Stát vydavatele periodika

CZ - Česká republika

Počet stran výsledku

9

Strana od-do

1627-1635

Kód UT WoS článku

—

EID výsledku v databázi Scopus

2-s2.0-85060699363