CREDIT RISK AND FINANCIAL PERFORMANCE OF THAI COMMERCIAL BANKS DURING 2019 - 2023
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Abstract
This research aimed to 1) study the credit risk factors of commercial banks in Thailand and 2) examine the impact of credit risk on the financial performance of these banks. The study utilized a sample of five commercial banks in Thailand, considering their total assets, and conducted a regression analysis to investigate the relationship between credit risk indicators and financial performance indicators from 2019 to 2023. The credit risk indicators included risk values, net profit margin, non-operating assets ratio, loan reserve rate, and borrowing ratio. The research findings indicated that various factors, such as changes in interest rates, competitive pressure, rapid increases in interest rates, and economic uncertainty, significantly impacted the credit risk of commercial banks in Thailand. These factors led to an increased risk for the banks. Additionally, the ability of these banks to generate profits, maintain asset quality, allocate credit, and manage debt levels were identified as crucial considerations. The study concluded that effective management of these factors could reduce credit risk and enhance the financial performance of commercial banks in Thailand. Awareness of these impacts is essential for planning future financial strategies and decisions. The regression analysis underscored the significant effect of credit risk variables on the financial performance of banks and highlighted the necessity for effective risk management strategies to improve profitability and strategic decision-making in commercial banks in Thailand.
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References
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