Credit Risk Management, Strategic Lending Decisions and Bank Profitability

Author(s)	Ms. Binita, Dr. Ramesh Bhavisetti
Country	United Kingdom
Abstract	Credit risk management plays a central role in shaping banks’ strategic lending decisions and overall profitability. In an environment characterized by financial uncertainty, regulatory pressure, and evolving borrower profiles, banks must balance risk exposure with income generation. This study examines the relationship between credit risk management practices, strategic lending decisions, and bank profitability using data from selected commercial banks. Bank profitability is measured using Return on Assets (ROA), Return on Equity (ROE), and Net Interest Margin (NIM), while credit risk is proxied through non-performing loan ratios and loan loss provisions. The findings reveal that effective credit risk management enhances strategic lending efficiency and significantly improves bank profitability. The study offers important insights for bank managers and policymakers seeking to strengthen credit governance frameworks and ensure sustainable banking performance.
Keywords	Credit Risk Management, Strategic Lending, Bank Profitability, Non-Performing Loans, Banking Sector.
Published In	Volume 8, Issue 1, January-February 2026
Published On	2026-01-12
DOI	https://doi.org/10.36948/ijfmr.2026.v08i01.66491

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