Credit Policy of Commercial Banks in EU and the Asset Quality of Non-Financial Corporate Loan Portfolio in 2009-2021

Aneta Kosztowniak
European Research Studies Journal, Volume XXV, Issue 1, 563-582, 2022
DOI: 10.35808/ersj/2871


Purpose: The study aims to identify changes in the credit activity of banks in EU, including the loan portfolio of non-financial corporation’s (NFCs) and main determinants of non-performing loans (NPLs) in Poland in the period Q1.2009 - Q4.2021. Design/Methodology/Approach: The study presents the differences in the NPL rates and debt servicing costs in the Visegrad Group countries, as well as Germany and France. The author presents the results of an overview of NPL research on EU countries. In modelling the NPLs granted to NFCs in Poland the variables used are, macroeconomic (market), financial variables of corporations, and banking conditions. Findings: The analysis of NPL changes shows that there was a long-term downward trend confirming the improvement in the quality of the portfolio of loans of NFCs. However, the last quarters (during the COVID pandemic) have brought an increase in the NPLs. Results of the impulse function confirmed, that the NPLs showed declining trends in response to impulses from, NPL's own changes, GDP, CPI, WIBOR, ROAC, GFCF, TOFSP and the increasing trends in response to changes, CROAC, GTPR, AIRCL, CAR and CR of CR. Results of variance decomposition indicate that the main pillar of the explanation of NPL changes were, GDP, GFCF as well as CPI and WIBOR. Practical Implications: The results of the research will enable the management of the loan portfolio of NFCs and credit risk management. Orginality/Value: The article contains a literature review and current research results concerning the analyzed issue Results of the NPLs research confirmed the pro-cyclical nature of lending activity in Poland in the verified years.

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