Macro and bank specific determinants of nonperforming loans in polish commercial banks

Abstract

The aim of this paper was to examine the determinants of non-performing loans (NPLs) in Polish commercial banks, and investigate the bank specific and macroeconomic determinants of NPLs for a panel of 18 banks from Poland, using annual data for the period 2005-2018. The authors applied four alternative estimation techniques: the fixed effects model, the random effects model, the difference Generalized Method of Moments and the system Generalized Method of Moments. The analyses show the bank-specific determinants, with the impact on the amount of NPLs including greturn on equity and growth of gross loans, while from the macroeconomic determinants the most important factors are: GDP growth, domestic credit to private sector, public debt and unemployment. and NPLs 0.12 and 0.27.