How size influences the credit risk in Islamic banks

Abstract

This research analyses the effects of the bank size and it financing to customer on credit risk, only few researches considered credit risk of Islamic banks by only focus on the determinants of credit risk, in this research, the authors considered a specific issue which is the size of both; the bank itself and the size of their financing to client. Using a sample of 48 Islamic banks from 16 countries around the world over the period from 2008 to 2018, a fixed effect panel data analysis has been applied, the results show that there is a negative relationship between the bank size and credit risk, a negative relationship between the financing to customer and credit risk, and a negative relationship between capital to assets ratio and credit risk.

Keywords

• islamic banks
• islamic financing tools
• credit risk
• size
• panel data