IMPROVING LOAN PORTFOLIO QUALITY AND CREDIT RISK MANAGEMENT MECHANISMS
Keywords:
loan portfolio quality, credit risk management, commercial banks, non-performing loans, Basel III, credit scoring, financial stability, risk monitoring, artificial intelligence, banking efficiencyAbstract
This study examines the mechanisms for improving loan portfolio quality and managing credit
risk in commercial banks under modern financial market conditions. The research focuses on analyzing the
impact of non-performing loans, capital adequacy, credit monitoring systems, and risk assessment mechanisms
on banking stability and operational efficiency. Using econometric and comparative analysis methods, the
study evaluates the effectiveness of modern credit risk management tools, including credit scoring systems,
Basel III standards, digital monitoring technologies, and artificial intelligence-based risk analysis. The findings
indicate that improving loan portfolio diversification, strengthening credit monitoring systems, and implementing
digital risk management mechanisms significantly reduce credit losses and enhance financial stability in
commercial banks. Furthermore, the study demonstrates that banks utilizing automated risk assessment and
real-time monitoring systems achieve higher forecasting accuracy and better portfolio performance compared
to traditional banking approaches. Based on the research findings, practical recommendations are proposed
for strengthening loan portfolio quality and enhancing credit risk management systems in commercial banks
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