Theory of Loan Portfolio and Credit Risk Management

This study examines the theoretical foundations of loan portfolio management and credit risk management in commercial banks under modern financial market conditions. The research analyzes the economic nature of credit risk, the principles of loan portfolio diversification, and the role of modern risk management mechanisms in ensuring banking stability and profitability. Special attention is given to the evolution of international banking standards, particularly Basel regulations, as well as the growing importance of digital technologies such as artificial intelligence, big data analytics, and automated credit scoring systems in contemporary banking operations. Using theoretical, comparative, and econometric approaches, the study evaluates the relationship between non-performing loans, capital adequacy, liquidity, and portfolio quality. The findings indicate that effective loan portfolio diversification and advanced credit risk management systems significantly reduce financial vulnerability and improve banking performance. Furthermore, the research highlights the importance of digital transformation in strengthening forecasting accuracy, optimizing lending decisions, and improving financial sustainability in commercial banks.