Determinants of Non-Performing Loans in Conventional and Islamic Banks: Emerging Market Evidence

• Autorzy: Feroz Khan , Sumon Ali , Naiem Hossain , Mithun Bairagi
• Języki publikacji: EN

Abstrakty

EN

This study examines the determinants of non-performing loans (NPLs) among macroeconomic and bank-specific factors for the Islamic and conventional banking sectors in Bangladesh. We implement a dynamic panel data model with a two-stage system GMM for the period 2010-2021. Among the bank-specific factors, this study finds that return on assets, return on equity, bank size, and inefficiency help to reduce NPLs. In contrast, gross loan growth, leverage, and capital adequacy ratios contribute to increasing NPLs. Among macroeconomic determinants, inflation, and GDP growth have a significant negative impact on NPLs. Moreover, unemployment and exchange rates are also found to be significant determinants of NPLs. At the bank level, growth in gross loans reduces NPLs in Islamic banks, while the opposite is true for conventional banks. Our findings have significant implications for depositors and regulators in making appropriate decisions.(original abstract)

Słowa kluczowe

EN

Islamic banking; Banking sector; Islam finance; Credit

PL

Bankowość islamska; Sektor bankowy; Finanse islamskie; Kredyt

• Czasopismo: Modern Finance
• Rocznik: 2023
• Tom: 1
• Numer: nr 1
• Strony: 59--69

Twórcy

autor

Feroz Khan

• Islamic University, Kushtia, Bangladesh

autor

Sumon Ali

• Islamic University, Kushtia, Bangladesh

autor

Naiem Hossain

• Islamic University, Kushtia, Bangladesh

autor

Mithun Bairagi

• Islamic University, Kushtia, Bangladesh

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Identyfikatory

DOI

10.61351/mf.v1i1.27