GRM 2010 GRM 2011

Abstract Details

 
AUTHOR NAME
 
Family Name:
Othman
 
First Name:
Jaizah
 
ABSTRACT OF PAPER
 
Title of Paper:
Multi-Dimensional Determinants of Credit Risks in Islamic Banks: A Panel Data Analysis on Non-Performing Loans
 
Paper Proposal Text :
This paper aims to empirically identify and evaluate the effect of macroeconomic and bank-specific factors on credit risks management or non-performing loans (NPLs) in the Islamic banking industry by employing panel data econometrics model for the period of 2000 to 2014 through unbalanced data. Its novel contribution is due to providing evidence on the macroeconomic factors with impact on bank loans quality for Islamic banks, and also by assessing the impact of the product development and credit concentration of Islamic financing on the NPLs in the Islamic banking sector. The study also analysis the impact of institutional environment on NPLs in Islamic banks. The paper finds that the followings variables are statistically significant in determining NPLs in` Islamic banks: return on assets ratio (ROA), net interest margin (NIM), liquidity ratio (LIQ), capital ratio (CAP), net charged-off ratio (NCOFF), gross domestic products growth rate (GDP), inflation rate (INF), fixed income debt ratio (FID), and political stability index (POL). The study also finds that NPLs are reduced with higher political stability index (POL) and is lower with fixed income debt (FID). Thus, the empirical results confirms previous findings, showing that bank specific, macroeconomics, institution environment and product development variables are the main determinants of NPLs in Islamic banks.
 
 
 

WITH THE GENEROUS SUPPORT OF