Non-performing Assets and their Impact on Financial Performance of Commercial Banks in Ethiopia
| dc.contributor.advisor | Ponnala, Venkati (PhD) | |
| dc.contributor.author | Ayalew, Addisu | |
| dc.date.accessioned | 2018-10-25T09:20:28Z | |
| dc.date.accessioned | 2023-11-04T09:02:44Z | |
| dc.date.available | 2018-10-25T09:20:28Z | |
| dc.date.available | 2023-11-04T09:02:44Z | |
| dc.date.issued | 2015-02 | |
| dc.description.abstract | Non-performing assets are always a center of concern for banks as well as all in the business world as a sound financial system, among other things, requires maintenance of a low level of non-performing assets. In this regard, to control the increasing non-performing assets in Ethiopian banking sector, the National Bank of Ethiopia issued a directive which strictly requires all banks to maintain ratio of their non -performing assets below five percent. The main objective of this study is, therefore, to examine the impact of non-performing assets on financial performance of Ethiopian commercial banks as increasing trend of non-performing assets are still a concern of some banks. Research hypothesis is developed which inquires the relationship and effect of non-performing assets on commercial banks financial performance. A quantitative approach is employed for the required data collection and a sample of six commercial banks are selected for data collection on a cross sectional basis for nine years. The data is then anayzed using descriptive, correlation and regression techniques through SPSS sofware pachage. .The findings of the study revealed that non-performing assets have statistically significant negative impact on the financial performance (ROA) of Ethiopian commercial banks in agreement with the hypothesis. Moreover, loan loss provision and capital adequacy ratios refleced an inverse and direct causal relationship with financial performance of commercial banks (ROA) respectively. Therefore, it is recommended that commercial banks in Ethiopia should enhance their capacity in credit analysis and loan administration while the regulatory authority should pay more attention to bank’s compliance to relevant provisions of the bank and other prudential guidelines. Key words: Non-Performing Assets, Financial performance | en_US |
| dc.identifier.uri | http://etd.aau.edu.et/handle/123456789/13197 | |
| dc.language.iso | en | en_US |
| dc.publisher | Addis Ababa University | en_US |
| dc.subject | Non-Performing Assets | en_US |
| dc.subject | Financial performance | en_US |
| dc.title | Non-performing Assets and their Impact on Financial Performance of Commercial Banks in Ethiopia | en_US |
| dc.type | Thesis | en_US |