Article Sidebar

Download
View Full Article S.I.S
Statistic
Read Counter : 204 Download : 105

Downloads

Download data is not yet available.

Metrics

Metrics Loading ...

Main Article Content

Abstract

The objective of the study is to determine the influence of loan portfolio management on the financial performance of banks in Ghana. The study adopted an explanatory cross-sectional survey as its research approach. The research was based on panel data acquired from banks that were in operation from 2010 to the present. Correlation analysis and regression analysis were used in the study, with regression models built by the researcher to assess the study's assumptions. The study shows that personal loans, real estate loans, and small and medium-sized enterprise loans all collectively do have a statistically significant impact on the financial performance of commercial banks. Overall, the model shows that the variables included in the model have a relatively good measure of fit and that the loan portfolio has a significant impact on ROA, ROE, and CR. A number of empirical research back up this conclusion, although it also conflicts with findings from certain other investigations. The study recommends the diversification of personal loans to reduce risks of defaults, which can be done by discriminating the borrowers based on the information available.

Keywords

Loan portfolio financial performance small and medium-sized enterprise Ghana

Article Details

Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.

How to Cite
Assifuah-Nunoo, E. (2023). The Effect of Loan Portfolio Management on the Performance of Banks in Ghana. Journal of Engineering Applied Science and Humanities, 8(2), 143–163. https://doi.org/10.53075/Ijmsirq/65564546747
Download Citation
Endnote/Zotero/Mendeley (RIS)
BibTeX
Crossref
Scopus
Google Scholar
Europe PMC

References

  1. Addai, B., & Chengyi, P. (2015). The Impact of Delinquent Loans on Financial Performance of Banks in Ghana. British Journal of Economics, Management & Trade, 9, 1-8. 10.9734/BJEMT/2015/19268
  2. Adebola, S. S., & Dahalan, J. (2011). An ARDL Approach to the Determinants of Non-performing Loans in Islamic Banking System in Malaysia. Kuwait Chapter of Arabian Journal of Business and Management Review, 1, 20-30.
  3. Adegboye, K., Ojeka, S., & Adegboye, K. (2020). Corporate Governance Structure: Bank Externalities and Sensitivity of Non-Performing Loans in Nigeria. Cogent Economics & Finance, 8, Article ID: 1816611. https://doi.org/10.1080/23322039.2020.1816611
  4. Alhassan, A. L., Kyereboah-Coleman, A., & Andoh, C. (2014). Asset Quality in a Crisis Period. An Empirical Examination of Ghanaian Banks. Review of Development Finance, 4, 50-62. https://doi.org/10.1016/j.rdf.2014.03.001
  5. Amuakwa-Mensah, F., & Boakye-Adjei, A. (2015). Determinants of Non-Performing Loans in Ghana Banking Industry. International Journal of Computational Economics and Econometrics, 5, 35-54. https://doi.org/10.1504/IJCEE.2015.066207
  6. Amuakwa-Mensah, F., Marbuah, G., & Marbuah, D. A. A. (2017). Re-Examining the Determinants of Non-Performing Loans in Ghana’s Banking Industry: Role of the 2007- 2009 Financial Crisis. Journal of African Business, 18, 357-379.
  7. https://doi.org/10.1080/15228916.2017.1308199
  8. Badar, M., & Javid, A. Y. (2013). Impact of Macroeconomic Forces on Nonperforming Loans: An Empirical Study of Commercial Banks in Pakistan. Was Transactions on Business and Economics, 10, 40-48.
  9. Bank of Ghana (2020). Banking Sector Report January 2020. Bank of Ghana Publication.
  10. Cerulli, G., D’Apice, V., Fiordelisi, F., & Masala, F. (2020). Benchmarking Non-Performing Loans. The European Journal of Finance, 26, 1591-1605. https://doi.org/10.1080/1351847X.2020.1794923
  11. Chiesa, G., & Mansilla-Fernandez, J. M. (2020). The Dynamic Effects of Non-Performing Loans on Banks’ Cost of Capital and Lending Supply in the Eurozone. Empirica, 48, 397-427. https://doi.org/10.1007/s10663-020-09475-5
  12. Curak, M., Pepur, S., & Poposki, K. (2013). Determinants of Non-Performing Loans Evidence from Southeastern European Banking Systems. Banks and Bank Systems, 8, 45-53
  13. Djiogap, F., & Ngomsi, A. (2012). Determinants of Bank Long-Term Lending Behavior in the Central African Economic and Monetary Community (CEMAC). Review of Economics & Finance, 2, 107-114
  14. Kjosevski, J., & Petkovski, M. (2016). Non-Performing Loans in the Baltic States: Determinants and Macroeconomic Effects. Baltic Journal of Economics, 17, 25-44. 10.1080/1406099X.2016.1246234
  15. Koju, L., Koju, R., & Wang, S. (2018). Macroeconomic and Bank-Specific Determinants of Non-Performing Loans: Evidence from the Nepalese Banking System. Journal of Central Banking Theory and Practice, 7, 111-138. https://doi.org/10.2478/jcbtp-2018-0026
  16. Lekwauwa, N., & Bans-Akutey, A. (2023). Commercial banks’ profitability and portfolio management in Ghana. Annals of Management and Organization Research, 3(4), 245–257. 10.35912/amor.v3i4.1420
  17. Messai, A. S., & Jouini, F. (2013). Micro and Macro Determinants of Non-Performing Loans. International Journal of Economics and Financial Issues, 3, 852-860.
  18. Monokroussos, P., & Gorstsos, G. (2020). Non-Performing Loans and Resolving Private Sector Insolvency. Palgrave Macmillan.
  19. Ozili, P. K. (2018). Non-Performing Loans and Financial Development: New Evidence. The Journal of Risk Finance, 20, 59-81. https://doi.org/10.1108/JRF-07-2017-0112
  20. PwC (2021). Digital Currencies: Is the Ghanaian Banking Sector Ready? 2021 PwC Ghana Banking Survey Report. PwC Ghana Ltd.
  21. Rathore, A. (2020). Management of Non-Performing Loans by Bhutanese Commercial Banks. International Journal of Economics and Business Research, 19, 166-192. https://doi.org/10.1504/IJEBR.2020.104758
  22. World Bank Group (2020). World Development Indicators. Publishing and Knowledge Division, World Bank.
  23. Yuksel, S., Dincer, H., & Karakus, H. (2020). Determination of Income and Expense Items That Have a High Impact on the Profitability of Turkish Banks. Journal of Financial Economics and Banking, 1, 1-9