Comparative analysis of non-performing loans affecting factors in the Baltic States

The deterioration of the economic situation during Covid-19 has raised the issue of the quality of banks' assets and in particular the growth of non-performing loans (NPL). This is a topical issue not only for banks that, in this context, incur additional costs for allowances and capital requirements but also for society as a whole, as credit availability is likely to be reduced. The Baltic States experienced a particularly severe financial crisis in 2008-2009, resulting in a rapid increase in NPLs. This study analyses the factors affecting NPLs in the Baltic States, using information available from WB, Eurostat, and econometrical modeling methods. The results of the study allow conclusions to be drawn on the necessary actions to mitigate credit risk.