Credit Risk Determinants of North Cyprus Banking Sector

This study is aimed at examining the determinants of credit risk of North Cyprus Banking sector. This study uses the sample of seven banks for ten years period from 2005 to 2014. The variables used in this study are credit risk (proxies by ratio of nonperforming loans to total loans) as the dependent variable and return on equity, liquidity ratio, credit growth, market power, and exchange rate are used as independent variables. Our findings shows that exchange rate have positive significant impact on North Cyprus credit risk while return on equity has negative significant impact on North Cyprus credit risk. Keywords: Credit risk, North Cyprus, banking sector, non-performing loans.