EuroEconomica, Vol 38, No 1 (2019)

Does Credit Risk Management affect the Financial Performance of Commercial Banks in Kosovo?

Arben Dermaku, Rrustem Asllanaj, Arber Hoti, Artor Nuhiu

Abstract


Abstract. This study analyses the impact of credit risk management on financial performance of commercial banks in Kosovo, and comparing the relationship between the determinants of credit risk management and financial performance by using CAMEL indicators. Panel data of 85 observations from 2008 to 2012 of ten commercial banks was analysed using multiple regression model. Findings through multiple regression analysis are presented in forms of tables and regression equations. The study also elaborates whether capital adequacy, asset quality, management efficiency, earnings and liquidity have strong or weak relationship with financial performance of commercial banks. The study concludes that CAMEL model can be used as a system of assessment and rating of credit risk management by commercial banks in Kosovo.

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