Microeconomic factors (bank-specific) have both positive and negative impacts on non-performing loans (NPLs), which, in turn, affect a country’s economic growth and development. Addressing issues such as liquidity and improving capital adequacy ratios can help reduce loan losses. However, when banks push to accelerate credit growth, they may spend less time in thoroughly assessing collateral, aiming to meet loan disbursement targets. Poor management can lead to inefficiency and high costs, exacerbating liquidity shortages and reducing returns. Diversifying banking activities can have mixed effects; while higher income streams may enhance lending capacity, banks with low capital face increased moral hazards and a higher risk of loan portfolio deterioration. Therefore, this chapter critically examines the relationship between NPLs and bank-specific microeconomic determinants using standard deviation and correlation coefficients to measure the significance of these relationships statistically. It also compares the relative performance of the UK, India, and Ireland by constructing a composite index based on key variables over a thirteen-year period (2008–2020). The relationship between major bank-specific determinants and NPLs, critically analysed in the chapter, includes bank capital-to-asset ratio, liquidity ratio, ROA, ROE, NIM, bank size, inefficient bank management, cost efficiency, and z-score.