Credit Risk Management and the Performance of Commercial Banks in Cameroon

ABSTRACT

Banking is a topic, practice, line of business or profession almost as old as the very existence of man, but literarily it raise be rooted deep back the days of the spiritual rebirth (by the Florentine Bankers). It has sprouted from the very primitive Stone-age bordering, through the Victorian-age to the technology-driven Google-age banking, include automatic teller machines (ATMs), source entry and debit cards, correspondent and meshing banking.
Credit danger has always been a vicinity of concern not only to bankers but to all in the business world because the risk of infections of a trading partner not fulfilling his obligations in full on due date can ill jeopardize the affaires of the other partner. Credit risk management in banks has become more important not only because of the monetary crisis that the world is experiencing nowadays but also the introduction of Basel II. Since granting credit is one of the main sources of income in mercantile banks, the management of the risk related to that credit affects the profitability of the banks. In our study, we try to contract out how the credit risk management affects the carrying into action of commercial banks in Cameroon. The study made use of standard chattered bank a case study.
Data for the period 1985 to 2010 was used. We have busy the regression model to do the analysis.



In this model, we have outlined profit as a performance indicator firearm non performing loans, performing loans, non performing loans, total loans, deposit gain rate, loan charges and lending growth rate as credit risk management indicators. The findings and analysis show that credit risk management has a significant effect on the performance of commercial banks in Cameroon.



CHAPTER ONE.

INTRODUCTION.

1. Background to the study.

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