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Uncertain Supply Chain Management

ISSN 2291-6830 (Online) - ISSN 2291-6822 (Print)
Quarterly Publication
Volume 13 Issue 1 pp. 1-10 , 2025

Bank-specific determinants of credit risk in Islamic banks: Evidence from Middle East Pages 1-10 Right click to download the paper Download PDF

Authors: Abdalla Mohammad Al Badarin, Najeeb Sameer Khreis, Mefleh Faisal Al-Jarrah, Emad Rafiq Barakat, Zakariya Salameh Shatnaw

DOI: 10.5267/j.uscm.2024.7.021

Keywords: Non-Performing Finance, Return On Assets, Finance Loss Provision, Capital Adequacy, Finance Expansion, Panel data

Abstract: Credit risk affects the work and reputation of banks. Islamic banks' heavy reliance on debt financing has led to increased interest in credit risk and its management. This paper aimed to identify the bank-specific factors affecting credit risk in Islamic banks, expressed as Non-Performing Finance NPF in the Middle East for the period 2011-2022. The study was based on a panel data analysis of 30 Islamic banks. The findings of study show a significant negative impact of Return On Assets ROA, Capital Adequacy Ratio CAR and size Z on the credit risk. The findings show a significant positive impact of Finance Loss Provision FLP on the credit risk. The findings also show no impact of Finance Expansion FEX, Finance to Deposit Ratio FDR and Capital Ratio CPR on the credit risk. The study showed that increasing the provision for financing losses and capital adequacy helps banks to reduce the impact of credit risks. The study recommends applying cautious lending policies and carefully selecting clients.



How to cite this paper
Badarin, A., Khreis, N., Al-Jarrah, M., Barakat, E & Shatnaw, Z. (2025). Bank-specific determinants of credit risk in Islamic banks: Evidence from Middle East.Uncertain Supply Chain Management, 13(1), 1-10.

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Journal: Uncertain Supply Chain Management | Year: 2025 | Volume: 13 | Issue: 1 | Views: 743 | Reviews: 0

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