Factors affecting credit risk of Islamic Banks in Malaysia / Anas Sastra Amijaya

The aim of this research paper is to identify the factors that cause credit risk of Islamic banks in Malaysia. This study was use a data that obtain from vary resources which significant yearly from 2009 to 2016 and it utilizes the suitable model to provide an evidences on Islamic banks credit risk in Malaysia. A comparison of these factors between selected Islamic banks in Malaysia is highlighted. Main objective of this research is to identify what is the factors that affect the level of credit risk of Islamic banks in Malaysia. In this study few variables being used to determine the credit risk faced by Islamic banks such as financial expansion, financing quality, capital buffer, management efficiency and net interest margin. Research methodology that being used to find the significant impact of independent variables toward dependent variables is Quantitative Data Analysis by Pooled Ordinary Least Square Regression and other test. The empirical results shown that few variables do significantly influence the credit risk of Islamic banks in Malaysia. The findings resulted that financing quality and net interest margin have a positive significant impact towards the credit risk of Islamic Banks. The findings provide supported evidence to the existing literature on credit risk specifically Islamic banks credit risk.