The evaluation model of a commercial bank loan portfolio

Irena Mačerinskiene, Laura Ivaškevičiute

Research output: Contribution to journalArticle

9 Citations (Scopus)

Abstract

As in other countries where the traditional banking is dominating, the major part of banks' assets and loan interest income makes a significant share of banks' income. Inappropriate loan portfolio evaluation might have negative impact on a commercial bank's performance, the overall banking system, and the economic growth of the country. It is not enough for a bank to have a precise strategy, high lending culture, and observance of general principles to ensure the further growth of profitable loans. It is necessary to apply various evaluation methods of historical and present data, of ratios and factors enabling to implement coherent and comprehensive loan portfolio evaluation, and to encompass different factors as far as possible. Due to a complex business environment and intense competition between banks, it is not enough to evaluate a commercial bank loan portfolio only through the aspect of credit risk, i.e. loss probability level aspect, as is suggested by the scientists. As to every business subject striving for a successful performance and further development, it is essential for a bank to earn profit by financing the other subjects, and to establish the level of assets liquidity.

Original languageEnglish
Pages (from-to)269-277
Number of pages9
JournalJournal of Business Economics and Management
Volume9
Issue number4
DOIs
Publication statusPublished - 2008

Fingerprint

Bank loans
Loan portfolio
Commercial banks
Evaluation model
Income
Loans
Assets
Evaluation
Factors
Economic growth
Bank performance
Liquidity
Profit
Financing
Evaluation method
Credit risk
Banking system
Lending
Banking
Business environment

Keywords

  • Bank
  • Evaluation
  • Liquidity
  • Loan
  • Loan portfolio
  • Profitability

ASJC Scopus subject areas

  • Business, Management and Accounting (miscellaneous)
  • Economics and Econometrics

Cite this

The evaluation model of a commercial bank loan portfolio. / Mačerinskiene, Irena; Ivaškevičiute, Laura.

In: Journal of Business Economics and Management, Vol. 9, No. 4, 2008, p. 269-277.

Research output: Contribution to journalArticle

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