Bank’s Non Performing Loans in Latin America

Abstract

This paper seeks to explore developments in the Latin American financial system over the last decade by analyzing the factors that determined non-performing loans during 2015-2024 and, above all, by showing that banks responded differently depending on internal and external factors. We explore financial and macroeconomic variables for Brazil, Colombia, Chile, Mexico, and Peru. Specifically, when we split the sample, the results are heterogeneous, with some variables affecting non-performing loans more than others. The split is based on the pandemic, which led to structural changes in the performance of the financial system in emerging countries.