Investigating the impact of credit risk on financial performance of commercial banks in Ghana

Figures & data

Table 1. Summary of descriptive statistics

Variable	Mean	Median	Maximum	Minimum	Standard Deviation
ROA	0.0449	0.0489	0.1100	−0.0368	0.0294
EVA	5.7065	11.3822	18.9849	−17.0782	12.0922
NPL	0.1710	0.1400	0.7200	0.0220	0.1238
LAR	0.5628	0.5489	1.2276	0.1881	0.2263
CAR	0.2318	0.2102	1.9034	0.0826	0.1937
SIZE	17.5225	15.5898	22.4411	13.8068	3.0592
AGE	3.3487	3.1781	4.8203	2.3979	0.7596
GDP	0.0503	0.0485	0.0810	0.0220	0.0230
INF	0.1401	0.1398	0.1746	0.0980	0.2907
MPR	0.2065	0.2065	0.2600	0.1600	0.0362

Source: Authors’ estimation

Table 2. Correlation analysis results

Economic Value-Added (EVA)
Variables	(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)	(9)
(1) EVA	1.000
(2) NPL	−0.214	1.000
(3) LAR	0.122	−0.285	1.000
(4) CAR	−0.111	−0.082	−0.298	1.000
(5) SIZE	0.232	−0.036	−0.252	0.190	1.000
(6) AGE	0.196	0.174	0.139	−0.055	−0.389	1.000
(7) GDP	−0.02	0.049	−0.228	0.158	0.062	-0.000	1.000
(8) INF	0.015	−0.012	0.194	−0.255	−0.058	-0.000	−0.446	1.000
(9) MPR	−0.078	0.187	−0.104	−0.127	0.006	-0.000	−0.479	0.379	1.000
Return on Asset (ROA)
Variables	(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)	(9)
(1) ROA	1.000
(2) NPL	−0.205	1.000
(3) LAR	0.018	−0.285	1.000
(4) CAR	0.005	−0.082	−0.298	1000
(5) SIZE	0.070	−0.036	−0.252	0.19	1.000
(6) AGE	0.192	0.174	0.139	−0.055	−0.389	1.000
(7) GDP	0.098	0.049	−0.228	0.158	0.062	-0.000	1.000
(8) INF	−0.094	−0.012	0.194	−0.255	−0.058	-0.000	−0.446	1.000
(9) MPR	−0.206	0.187	−0.104	−0.127	0.006	-0.000	−0.479	0.379	1.000

Source: Authors’ estimation

Table 3. Hausman specification test results (ROA Model)

Test Summary	Chi-square Statistics	Chi-square d.f	Probability
Cross-section	1.9796	7	0.9610

Source: Authors’ estimation

Table 4. Hausman specification test results (EVA Model)

Test Summary	Chi-square Statistics	Chi-square d.f	Probability
Cross-section	1.1208	7	0.8849

Source: Authors’ estimation

Table 5. Effect of credit risk on financial performance results

	ROA Model			EVA Model
Variable	Coefficient	Std. Error	Prob.	Coefficient	Std. Error	Prob.
Constant	−0.0489	0.0562	0.3844	−9.2839	0.2157	0.0661
NPL	−0.0284	0.0250	0.1567	−17.4785	0.8367	0.0367
LAR	0.0121	0.0164	0.4615	3.5086	0.5609	0.5316
CAR	0.0025	0.0138	0.8521	−11.5735	0.4533	0.0107
SIZE	0.0016	0.0017	0.2347	0.4346	0.6254	0.0487
AGE	0.0102	0.0088	0.0244	3.9913	0.3929	0.3097
GDP	0.4577	0.2063	0.0265	15.5104	0.3219	0.8177
INF	0.5269	0.2648	0.0467	22.5929	0.7027	0.7967
MPR	−0.3304	0.1375	0.0163	−29.9483	0.8031	0.5132
R-Squared	0.7557			0.6837
Adj. R-Squared	0.7083			0.6170
Chi-Squared	22.2793		0.0044	23.3362		0.0029

Source: Authors’ estimation

Table 6. Diagnostic test results

Breusch-Godfrey test for serial correlation
Model	Chi-square	Df	p-value
ROA	5.4018	6	0.4934
EVA	10.1060	6	0.1203
Breusch-Pagan test for heteroscedasticity
Model	BP	df	p-value
ROA	18.1780	8	0.1993
EVA	19.5990	8	0.1196

Source: Authors’ estimation