Bank Specific, Business And Institutional Environment Determinants Of Banks Nonperforming Loans: Evidence From MENA Countries
The paper empirically analyzes the determinants of Non-Performing Loans (NPL) and the potential impact of both business and institutional environment on credit risk exposure of banks in the MENA region. Looking at a sample of 46 banks in 12 countries over the period 2002 - 2006, the authors find that, among bank specific factors, foreign participation coming from developed countries, high credit growth and loan loss provisions reduce the NPL level. However, highly capitalized banks experience high level of credit exposure. Credit quality of banks is also positively affected by the relevance of the information published by public and private bureaus.