[Solution]Topic of the Paper: Assessment of credit risk impact on financial performance of commercial banks in EU countries

Requirements / Mandatory elements to be included   Evaluation of data sample used for the Empirical research, presentation and evaluation of data sources, their collection…

Requirements / Mandatory elements to be included
 

Evaluation of data sample used for the Empirical research, presentation and evaluation of data sources, their collection methods;
Presentation and evaluation of Systemized results of the empirical research;
Validity and limitations of the results of the empirical research;
Conclusions on acceptability of research hypothesis formulated;
Scientific discussion of the empirical results, based on the comparable analysis with the results of the previous researchers.

 
Method to be used —- SYS GMM Estimator as main method. (Working with panel data already collected)
Robustness check by switching estimator and proxies of variables
Dependent variables

ROA ( return on assets )
ROE ( return on equity)
NIM ( net interest margin)

Independent variables

NPLR ( Non-performing loan ratio)
LLPR ( loan loss provision ratio )
NPL / TL = non-performing loans to total loans
CAR (capital adequacy ratio) note need to collect this ratio not given in the excel sheet.

Control Variables

BS (Bank size)
TD ( Total deposit )
LA ( loan and advances )
Loan loss / gross loan ( Loan loss /grsl )
Loan loss / net income ( loanlss/netrev)
In deposit

 Econometrics model (SYS – GMM to be used)
Credit risk = β0 + β1ROA +β2ROE+ β3NIM + β4NPLR+ β5LLPR+ β6NP/TL +β7 CAR+ β8BS + (β9 TD + β10 LA +µany other control variable can be used instead of TD and LA)
 
Note Important: at least three control variables are to be included in the research, bank size (BS) and any two from the remaining list of control variables.
Formatting APA Style citation, Times new Roman, size 12.
Total no of pages: 20
Sample Size: 46 EU commercial banks, data already collected in excel file,only need to collect two more control variables.
Research hypothesis
Hypothesis H1: The impact of credit risk on the financial performance of EU commercial banks after global financial crisis is significant
 
Sub hypotheses, which support the Hypothesis 1:
H1.1: The impact of credit risk on ROA of EU commercial banks after global financial crisis is significant
H1.2: The impact of credit risk on ROE of EU commercial banks after global financial crisis is significant. 
H1 3: The Impact of credit risk on Net interest Income of EU commercial banks after global financial crisis is significant.
H2: The impact of credit risk on financial performance of EU commercial banks after global financial crisis is increasing
Sub hypothesis, which support the hypothesis 2:
H2.1: The impact of credit risk on ROA of EU commercial banks after global financial crisis is increasing
H2.2: The impact of credit risk on ROE of EU commercial banks after global financial crisis is increasing.
H2.3: The impact of credit risk on Net Interest Income of EU commercial banks after global financial crisis is increasing.
 
Study period 10 years from 2008 to 2017.
No of banks selected 46 European banks.
 
 
 
 
 
 
 
 

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