The Effects of Nonperforming Loans on Dynamic Network Bank Performance
This paper is to explore the relationship between banks’ performance and their nonperforming loans (NPLs). The banks’ performance through a network production process structure with NPLs is developed. With increasing NPLs in recent years, the quality of lending assets is a key significant and influe...
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| Main Authors: | , , , |
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| Format: | Article |
| Language: | English |
| Published: |
Wiley
2017-01-01
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| Series: | Discrete Dynamics in Nature and Society |
| Online Access: | http://dx.doi.org/10.1155/2017/9458315 |
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| author | Day-Yang Liu Ya-Chiang Wu Cheng-Hsien Lin Wen-Min Lu |
| author_facet | Day-Yang Liu Ya-Chiang Wu Cheng-Hsien Lin Wen-Min Lu |
| author_sort | Day-Yang Liu |
| collection | DOAJ |
| description | This paper is to explore the relationship between banks’ performance and their nonperforming loans (NPLs). The banks’ performance through a network production process structure with NPLs is developed. With increasing NPLs in recent years, the quality of lending assets is a key significant and influencing factor for banks’ operational risk. The research methodology is to integrate the radial and nonradial measures of efficiency into the network production process framework with NPLs; this study utilizes network epsilon-based measure model to evaluate the banking industry performance. In addition, the key characteristics of the bank industry including those of financial holding companies and privatized government banks are needed to be figured out and to provide insight into what causes imperfectly competitive conditions for some banks. The results demonstrate that the banking sector grew consistently in three aspects of operation: operating performance, profitability performance, and risk management in the last five years of the subject period. These results showed that the overall banking sector was capable of pursuing growth in both operations and profits while accounting for risk management. The potential applications and strengths of network data envelopment analysis in assessing financial organizations are also highlighted. |
| format | Article |
| id | doaj-art-ca079fb2e2ee42769fb24de33877dc29 |
| institution | Kabale University |
| issn | 1026-0226 1607-887X |
| language | English |
| publishDate | 2017-01-01 |
| publisher | Wiley |
| record_format | Article |
| series | Discrete Dynamics in Nature and Society |
| spelling | doaj-art-ca079fb2e2ee42769fb24de33877dc292025-02-03T05:57:48ZengWileyDiscrete Dynamics in Nature and Society1026-02261607-887X2017-01-01201710.1155/2017/94583159458315The Effects of Nonperforming Loans on Dynamic Network Bank PerformanceDay-Yang Liu0Ya-Chiang Wu1Cheng-Hsien Lin2Wen-Min Lu3Graduate Institute of Finance, National Taiwan University of Science and Technology, No. 43, Sec. 4, Keelung Rd., Taipei 106, TaiwanSchool of Management, National Taiwan University of Science and Technology, No. 43, Sec. 4, Keelung Rd., Taipei 106, TaiwanDepartment of Financial Management, National Defense University, No. 70, Section 2, Zhongyang North Road, Beitou, Taipei 112, TaiwanDepartment of Financial Management, National Defense University, No. 70, Section 2, Zhongyang North Road, Beitou, Taipei 112, TaiwanThis paper is to explore the relationship between banks’ performance and their nonperforming loans (NPLs). The banks’ performance through a network production process structure with NPLs is developed. With increasing NPLs in recent years, the quality of lending assets is a key significant and influencing factor for banks’ operational risk. The research methodology is to integrate the radial and nonradial measures of efficiency into the network production process framework with NPLs; this study utilizes network epsilon-based measure model to evaluate the banking industry performance. In addition, the key characteristics of the bank industry including those of financial holding companies and privatized government banks are needed to be figured out and to provide insight into what causes imperfectly competitive conditions for some banks. The results demonstrate that the banking sector grew consistently in three aspects of operation: operating performance, profitability performance, and risk management in the last five years of the subject period. These results showed that the overall banking sector was capable of pursuing growth in both operations and profits while accounting for risk management. The potential applications and strengths of network data envelopment analysis in assessing financial organizations are also highlighted.http://dx.doi.org/10.1155/2017/9458315 |
| spellingShingle | Day-Yang Liu Ya-Chiang Wu Cheng-Hsien Lin Wen-Min Lu The Effects of Nonperforming Loans on Dynamic Network Bank Performance Discrete Dynamics in Nature and Society |
| title | The Effects of Nonperforming Loans on Dynamic Network Bank Performance |
| title_full | The Effects of Nonperforming Loans on Dynamic Network Bank Performance |
| title_fullStr | The Effects of Nonperforming Loans on Dynamic Network Bank Performance |
| title_full_unstemmed | The Effects of Nonperforming Loans on Dynamic Network Bank Performance |
| title_short | The Effects of Nonperforming Loans on Dynamic Network Bank Performance |
| title_sort | effects of nonperforming loans on dynamic network bank performance |
| url | http://dx.doi.org/10.1155/2017/9458315 |
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