Determinant of loan loss provision in Malaysia conventional bank / Noradilah Samsudin

A loan loss provision is charge to bank profit and loss statement that creates a reserve on their balance sheets. The research problem of this study is to explore the main factor driving the changes in amount of loan loss provision in Malaysian Conventional Bank. The hypotheses testing employed regression with Panel Data Ordinary Least Square for four independent variables which is return on average assets (ROA), earning before tax and provisions (EBTP), non performing loans (NPL) and Gross Domestic Product GDP). This research will collect the data from chosen conventional bank in Malaysia that provides the complete data for this study over the period 1st quarter 2004 until 2nd quarter 2012. The result show there is positive relationship between Loan Loss Provision with Non Performing Loan, Return on Asset and Gross Domestic Product. Managers of Conventional banks can now comprehend better the factors that influence the changes in amount of loan loss provision. The findings of this study should be value to Malaysian Conventional Bank in terms of better manage their reserve to avoid from loss for their futures and smooth their earning to attract customer.