Bank specific determinantsof non-performing loans in the Republic of Macedonia
Bank specific determinantsof non-performing loans in the Republic of Macedonia

Summary/Abstract: The paper observes the non-performing loans (NPLs) in selected developed and developing countries, with a certain focus on the trend and determinants for NPLs in the banking sector of the Republic of Macedonia. High and rising levels of NPLs in the banking sector in the USA, as well as many countries in the Central and Eastern and South-Eastern Europe (CESEE), continue to put strong pressure on banking performances. The empirical research for NPLs in the banking sector in the Republic of Macedonia has acknowledged explicit bank variables influencing NPLs in the banking sector, such as foreign currency spreads between reference lending and deposit rates, personnel expenses/non-interest expenses, equity and reserves/assets and liquid assets/total assets. Moreover, analysis of the internal variables confirmed the previous finding that liquid assets/total assets and personnel expenses/non-interest expenses represent key factors influencing the level the NPLs in the banking sector in the Republic of Macedonia.

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