AN ANALYSIS OF EFFECTS OF NON-PERFORMING LOANS ON THE SOUNDNESS OF THE BANKS

Abstract

The soundness of banks is vital for the countries in order to achieve sustainable economic growth and welfare of the society. the nonperforming loans level is the one of most important factor affecting the soundness of banks. In this context, the main aim of this study is to investigate the relationship between soundness banks and the nonperforming loans level for the 140 countries across the world for the data 2019 by using statistical techniques. In the study, it is concluded that there is significant difference among for soundness level of the banks by the nonperforming loans level. There is a negative correlation between soundness banks and the nonperforming loans level. As the nonperforming loans level increases then soundness banks decreases. For this reason, nonperforming loans level should be carefully observed when expanding credit policies to protect soundness banks.