THE IMPACT OF THE FINANCIAL CRISIS ON BANK PROFITABILITY

Abstract

The purpose of this paper is to provide a perspective on the impact of the financial crisis and credit-risk exposure management on bank profitability. The global financial crisis had affected the financial system and financial stability all over the world. Banks’ specific characteristics and domestic and external adverse macroeconomic developments had a great impact on bank profitability. Moreover, a major concern for banks was the increase of credit losses on the market. As non-performing loans have a significant negative impact on bank performance, issues of loan portfolio quality and NPLs are explored more in depth in the paper.

Keywords

• financial crisis
• credit risk
• non-performing loans
• bank profitability
• bank management