IMPLICATIONS OF CSR ON NON-PERFORMING LOANS IN THE ASEAN BANKING INDUSTRY

Abstract

Banks with good reputation are linked to better financial performance and creditworthiness.
Their incentives to achieve that should be directed toward a more strict pre-loan evaluations of
borrowers. This research examines whether there is any link between corporate social
responsibility (CSR) and non-performing loans (NPLs) in the ASEAN banking industry. The
sample in the study consists of 60 publicly listed banks from Singapore, Malaysia, Indonesia,
Thailand, Philippines, and Vietnam with a time period of 6 years from 2011-2016. A crosssectional approach is applied to assess the relationship between NPLs and CSR and other
selected control variables. The study employs multiple regression analysis to determine the
relationship between variables. The results indicate that there is no significant link between
NPLs and CSR in the ASEAN banking industry. Notwithstanding that, the findings exhibit a
significant negative relationship for profitability and firm size with NPLs. The findings also
show an insignificant impact of banking ownership toward NPLs.