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Archive » January 2020 » Macroeconomic and Bank-specific determinants of Npls in Europe: the role of branches and bank size

Macroeconomic and Bank-specific determinants of Npls in Europe: the role of branches and bank size

Candida Bussoli, Vito Caputo, Danilo Conte
January 2020 - n. 1
Keywords: Bank, doubtful loans, non-performing loans, impaired loans
Jel codes: G20, G21

The paper aims to test the impact of macroeconomic and microeconomic indicators on the quality of bank lending, based on a sample of 711 European banks with different specialisations, in the period 2013-2017. The evidences show that, on one side, adverse macro conditions worsen the quality of loans. On the other side, banks with higher profitability and capitalisation have a lower level of non-performing loans and loss reserves. Finally, the analysis indicates that more branches are negatively associated with credit quality, however their negative impact is reduced for larger banks.

 

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