DETERMINANTS OF NONPERFORMING LOANS: The case of Bosnia and Herzegovina

Snježana Djokic, Svetlana Dušanić Gačić, Zorana Agic


The aim of the research is to identify the factors affecting the rate of nonperforming loans in the banking sector of Bosnia and Herzegovina in the period 2006 - 2015 year. The authors assume that the impact on the quality of the loan have the macroeconomic and specific banking factors. Aggregate data were used, which are taken from the database of the Central Bank of Bosnia and Herzegovina and the World Bank. The empirical results show that there is a correlation between bad loans and the various macro-economic (annual growth rate of gross domestic product, consumer prices and unemployment) and specific banking (the ratio of loans and deposits, interest rate, return on equity and return on assets) factors.

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ISSN : 2251-1555