Citation

Mensah, Leviticus and Arhinful, Richard and Obeng, Hayford Asare and Gyamfi, Bright Akwasi (2026) The impact of non-performing loans on banks’ reputation: evidence from the New York Stock Exchange. International Journal of Economic Policy Studies. ISSN 2524-4892

Text s42495-026-00169-7.pdf - Published Version Restricted to Repository staff only Download (854kB)

Abstract

A high level of non-performing loans (NPLs) indicates poor lending practices and undermines banks’ reputations with regulators, customers, and investors. A strong reputation offers banks a competitive edge. Guided by signaling theory, this study investigates the impact of NPLs on the reputational standing of banks in a competitive market. The sample comprises 244 banks listed on the New York Stock Exchange, selected using specific inclusion criteria and purposive sampling. The study analyzes data spanning 18 years (2006–2023), sourced from Thomson Reuters Eikon DataStream. Advanced estimation techniques, including Feasible Generalized Least Squares (FGLS) and the Generalized Method of Moments (GMM), were employed. The results show that NPLs have a significant negative effect on bank reputation. Moreover, the interaction of NPLs with corporate governance quality, bank size, and bank age positively and significantly influences reputation. To reduce NPLs, banks should strengthen credit risk management by adopting advanced risk assessment tools and enforcing stricter loan approval standards.

Item Type:	Article
Uncontrolled Keywords:	Banks
Subjects:	H Social Sciences > HG Finance > HG1501-3550 Banking
Divisions:	Faculty of Management (FOM)
Depositing User:	Ms Rosnani Abd Wahab
Date Deposited:	05 Jun 2026 04:19
Last Modified:	05 Jun 2026 04:19
URII:	http://shdl.mmu.edu.my/id/eprint/16011

Downloads

Edit (login required)