Determinants of credit risk in Bangladeshi and Malaysian Islamic banks

Md Nurul Kabir, Suzuki Yasushi

    Research output: Chapter in Book/Report/Conference proceedingChapterResearchpeer-review

    Abstract

    In order to achieve sustainable long-run growth by Islamic banks, it is vital to focus on the risk management practices of Islamic banks, especially in managing credit risk.This study considers both macroeconomic and bank specific variables that affect the credit risk of Islamic banks in Bangladesh and Malaysia. Using ordinary least squares techniques, we find three significant determinants of credit risk in Islamic banks in Bangladesh, namely, the loan to deposit ratio, cost inefficiency, and size. In contrast, two additional variables significantly affect the credit risk of Islamic banks in Malaysia,namely, credit growth and the returns on assets. In addition, we find macroeconomic factors do not exert any significant impact on the nonperforming loans of Islamic banks in either of these countries.

    Original languageEnglish
    Title of host publicationContemporary Issues in Islamic Finance
    Subtitle of host publicationPrinciples, Progress and Prospects
    PublisherNova Science Publishers
    Chapter7
    Pages97-108
    Number of pages12
    ISBN (Electronic)9781629489063
    ISBN (Print)9781629489056
    Publication statusPublished - 1 Jan 2014

    Fingerprint

    Credit risk
    Islamic financial institutions
    Bangladesh
    Malaysia
    Credit growth
    Return on assets
    Management practices
    Long-run growth
    Macroeconomic factors
    Loans
    Risk management
    Ordinary least squares
    Non-performing loans
    Cost inefficiency
    Deposits
    Macroeconomics

    Cite this

    Kabir, M. N., & Yasushi, S. (2014). Determinants of credit risk in Bangladeshi and Malaysian Islamic banks. In Contemporary Issues in Islamic Finance: Principles, Progress and Prospects (pp. 97-108). Nova Science Publishers.
    Kabir, Md Nurul ; Yasushi, Suzuki. / Determinants of credit risk in Bangladeshi and Malaysian Islamic banks. Contemporary Issues in Islamic Finance: Principles, Progress and Prospects. Nova Science Publishers, 2014. pp. 97-108
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    Kabir, MN & Yasushi, S 2014, Determinants of credit risk in Bangladeshi and Malaysian Islamic banks. in Contemporary Issues in Islamic Finance: Principles, Progress and Prospects. Nova Science Publishers, pp. 97-108.

    Determinants of credit risk in Bangladeshi and Malaysian Islamic banks. / Kabir, Md Nurul; Yasushi, Suzuki.

    Contemporary Issues in Islamic Finance: Principles, Progress and Prospects. Nova Science Publishers, 2014. p. 97-108.

    Research output: Chapter in Book/Report/Conference proceedingChapterResearchpeer-review

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    Kabir MN, Yasushi S. Determinants of credit risk in Bangladeshi and Malaysian Islamic banks. In Contemporary Issues in Islamic Finance: Principles, Progress and Prospects. Nova Science Publishers. 2014. p. 97-108