COMPARATIVE CREDIT RISK ANALYSES IN DASHEN BANK AND COMMERCIAL BANK OF ETHIOPIA

Abstract

This research paper titled “comparative analysis” was conducted by taking Dashen Bank (DB) and commercial Bank as case study. The main objective of the study is to evaluate and compare the Credit Risk of Dashen bank and commercial bank for the fiscal period (2015-2018/19 G.C). To achieve this objective, mainly secondary data sources was used. The secondary data iscollected from annual reports, directives, and bulletins of the bank. Descriptive statisticaltools are used in analyzing the data collected. And also; the research used comparative analysis and ratio analysis to measure their financial Credit Risk. The ability of banks to formulate andadhere to policies and procedures that promote credit quality and curtail non-performing loansis the means to survive in the stiff competition. Inability to create and build up quality loansand credit worthy customers leads to default risk and bankruptcy as well as hampers economic growth of a country. The study would be used variables, Capital adequacy, and non- performing loan, loan to deposit, cash to deposit and loan to asset ratios. The results showed that thus variables have significant relationship with both banks. Finally, the research offered suggestions for the improvement of efficiency in Credit Risk in selected banks