Credit Risk in Islamic Banks of GCC Countries

This study investigates factors which affect credit risk of Islamic banks in Gulf Cooperation Council (GCC) countries. The study uses secondary data obtained from the web sites of 25 Islamic banks during the period from 2006 to 2010. We exclude Saltant Oman which has no Islamic banks. This study use...

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Main Author:	Al-Wesabi, Hamid Abdulkhaleq Hasan
Format:	Thesis
Language:	eng eng
Published:	2012
Subjects:	HG Finance
Online Access:	https://etd.uum.edu.my/3137/1/HAMID_ABDULKHALEQ_HASAN_AL-WESABI.pdf https://etd.uum.edu.my/3137/2/HAMID_ABDULKHALEQ_HASAN_AL-WESABI.pdf
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id	my-uum-etd.3137
record_format	uketd_dc
institution	Universiti Utara Malaysia
collection	UUM ETD
language	eng eng
advisor	Ahmad, Nor Hayati
topic	HG Finance
spellingShingle	HG Finance Al-Wesabi, Hamid Abdulkhaleq Hasan Credit Risk in Islamic Banks of GCC Countries
description	This study investigates factors which affect credit risk of Islamic banks in Gulf Cooperation Council (GCC) countries. The study uses secondary data obtained from the web sites of 25 Islamic banks during the period from 2006 to 2010. We exclude Saltant Oman which has no Islamic banks. This study uses Non-Performing loans (NPLs) as a proxy for credit risk which is dependent variable. The independent variables consist of three macroeconomic variables Gross Domestic Product (GDP), Inflation rate (INF) and London Inter-Bank Offered Rate and six other variables (bank specific) that are used as internal variables. These are management efficiency (MGTEFF), loan to deposit (L/D), risky asset (RSKAST), total assets (LNTA), regulatory capital (REGCAP) and loan loss provision (LLP). We find that GDP is significant and negatively related to credit risk, and it is similar with finding of past studies, but inflation rate and LIBOR are insignificantly related, and they are different with literature. We find that MGTEFF is significantly and negatively related to credit risk, while L/D and RSKAST are significant and positively related to credit risk. All of them are similar with finding of previous studies. And other internal variables (LNTA, REGCAP, and LLP) are not significantly related to the credit risk. Size of banks is differed with past studies, LNTA and REGCAP are positive related to credit risk, while LLP is negative related to the credit risk of Islamic banks in GCC countries.
format	Thesis
qualification_name	masters
qualification_level	Master's degree
author	Al-Wesabi, Hamid Abdulkhaleq Hasan
author_facet	Al-Wesabi, Hamid Abdulkhaleq Hasan
author_sort	Al-Wesabi, Hamid Abdulkhaleq Hasan
title	Credit Risk in Islamic Banks of GCC Countries
title_short	Credit Risk in Islamic Banks of GCC Countries
title_full	Credit Risk in Islamic Banks of GCC Countries
title_fullStr	Credit Risk in Islamic Banks of GCC Countries
title_full_unstemmed	Credit Risk in Islamic Banks of GCC Countries
title_sort	credit risk in islamic banks of gcc countries
granting_institution	Universiti Utara Malaysia
granting_department	Othman Yeop Abdullah Graduate School of Business
publishDate	2012
url	https://etd.uum.edu.my/3137/1/HAMID_ABDULKHALEQ_HASAN_AL-WESABI.pdf https://etd.uum.edu.my/3137/2/HAMID_ABDULKHALEQ_HASAN_AL-WESABI.pdf
_version_	1747827506817269760
spelling	my-uum-etd.31372022-04-10T06:09:36Z Credit Risk in Islamic Banks of GCC Countries 2012-01 Al-Wesabi, Hamid Abdulkhaleq Hasan Ahmad, Nor Hayati Othman Yeop Abdullah Graduate School of Business Othman Yeop Abdullah Graduate School of Business HG Finance This study investigates factors which affect credit risk of Islamic banks in Gulf Cooperation Council (GCC) countries. The study uses secondary data obtained from the web sites of 25 Islamic banks during the period from 2006 to 2010. We exclude Saltant Oman which has no Islamic banks. This study uses Non-Performing loans (NPLs) as a proxy for credit risk which is dependent variable. The independent variables consist of three macroeconomic variables Gross Domestic Product (GDP), Inflation rate (INF) and London Inter-Bank Offered Rate and six other variables (bank specific) that are used as internal variables. These are management efficiency (MGTEFF), loan to deposit (L/D), risky asset (RSKAST), total assets (LNTA), regulatory capital (REGCAP) and loan loss provision (LLP). We find that GDP is significant and negatively related to credit risk, and it is similar with finding of past studies, but inflation rate and LIBOR are insignificantly related, and they are different with literature. We find that MGTEFF is significantly and negatively related to credit risk, while L/D and RSKAST are significant and positively related to credit risk. All of them are similar with finding of previous studies. And other internal variables (LNTA, REGCAP, and LLP) are not significantly related to the credit risk. Size of banks is differed with past studies, LNTA and REGCAP are positive related to credit risk, while LLP is negative related to the credit risk of Islamic banks in GCC countries. 2012-01 Thesis https://etd.uum.edu.my/3137/ https://etd.uum.edu.my/3137/1/HAMID_ABDULKHALEQ_HASAN_AL-WESABI.pdf text eng public https://etd.uum.edu.my/3137/2/HAMID_ABDULKHALEQ_HASAN_AL-WESABI.pdf text eng public masters masters Universiti Utara Malaysia Ahmad,N.H. and Ariff,M. 2007.Multi-Country Study Of Bank Credit Risk Determinants.The International Journal of Banking and Finance, 5,135-152. Ahmad,N.H. and Nizam.A,S. 2004.Key Factors Influencing Credit Risk of Islamic Bank: A Malaysian Case.Review of Financial Economic,2.Islamic Development Bank–Islamic Research and Training.(IRTI).Retrieved On May 15 2008. 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Credit Risk in Islamic Banks of GCC Countries

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