Graduate papers
Description of the graduate paper
Form of studies Master
Title of the study programm Business Finance
Title in original language Kredītriska menedžmenta ietekme uz Latvijas komercbanku ienesīgumu
Title in English The Effect of Credit Risk Management on Profitability of Commercial Banks in Latvia
Department 22000 Faculty of Engineering Economics and Management
Scientific advisor Konstantins Kozlovskis
Reviewer Nadežda Semjonova
Abstract First of all, throughout the last decades the world banking system has transformed significantly with the elaboration of new financial instruments, entry of new market players and the active proceedings of the internationalization processes. Thus, it led to the emergence of new opportunities however in a meantime new challenges. Financial institution as any other corporate entity is working on a commercial basis with the aim of profit maximization. However, compared to separate enterprises business models, financial establishments’ performance has much wider and significant influence on the environment where they are operating and even far beyond as long as banking system is working in close interrelation and changes occurred in one element of this system automatically spread on the whole sector in general. Therefore, it is of paramount importance to investigate the main performance drivers of banks and determine the factors impacting profitability respectively. Notwithstanding the fact that many researches have been carried out on this particular topic, only some could clearly explain the relationship between credit risk management and profitability of commercial banks in Latvia. The Analytical part includes the analysis of theoretical conclusions of scientific literature conducted prior as well as concepts definition. In this part of the research a current state of the banking sector in Latvia is examined and overview of main characteristics of Latvian banking sector is made. The purpose of this chapter is to provide a preliminary insight on the researched topic and introduction to the studied banking environment. The Theoretical part describes main empirical studies conducted on the researched topic. At this stage of the research the author analyzes the main sources of credit risks in the banks and their management techniques respectively. The author studies and provides detailed description of main credit management models also making a brief specification of the practical model elaborated. In the Scientific and Practical part an effect of credit risk management on profitability is estimated through the correlation analysis along with two regression models elaborated and evaluated. Moreover, the practical part includes survey results presentation and analysis.
Keywords credit risk, Latvian banking system, profitability, key financial indicators, analysis, interconnection, impact
Keywords in English credit risk, Latvian banking system, profitability, key financial indicators, analysis, interconnection, impact
Language eng
Year 2016
Date and time of uploading 01.06.2016 16:02:24