Abstract

Purpose: Banks and financial institutions in any society are essential factors of the economic cycle and recognized as trusted authorities for managing money. Given that banks have significant role in economic system, identifying factors that influence risk in the banking is importance. One of factors is non-performing loans (NPLs). Therefore, the objective of this research is to examine the factors influencing NPLs in banks.
Method: To conduct the research, a sample consisting of 15 banks listed on the Tehran Stock Exchange was selected through a systematic elimination method over the period from 2014 to 2022. For testing the research hypotheses, multivariate regression and generalized least squares methods were employed using Eviews and Stata software.
Results: The results of this research indicated that the sub-indicators of asset quality, financial and liquidity conditions, profitability and capital status, competitive position, risk status, and management performance have different impacts on the non-performing loans (NPLs) of banks.
Conclusion: We can explained Non-performing loans with different factors. This empirical evidence indicates the indicators can cause problems in the future.
Contribution: Identifying these factors assists regulatory institutions in implementing appropriate interventions, designing credit policies, and adopting prudential regulations to reduce non-performing loans.