One reason a bank's officer may be reluctant to write off a past-due loan is that it will:

Question

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Writing off a past-due loan means the bank has to adjust its assets and decrease its capital, as it is reducing the value of an asset (the loan) that was supposed to generate revenue for the bank. This can hurt the bank's financial position and ability to lend in the future. Therefore, officers may be reluctant to write off such loans.

One Reason a Bank's Officer May Be Reluctant to Write