Financing concentration and credit risks: empirical study on the Islamic banks in Malaysia / Abdulazeez Adewuyi Abdurraheem, Md. Mahmudul Alam and Farah Aida Ahmad Nadzri

Sectoral financing concentration in a few sectors of the economy by Islamic banks in Malaysia has become a recurring issue. The objective of this study was to examine the relationship between financing concentration and Islamic banking credit risks in Malaysia. The study employed the Hirschman-Herfi...

Full description

Saved in:
Bibliographic Details
Main Authors: Abdurraheem, Abdulazeez Adewuyi, Alam, Md. Mahmudul, Ahmad Nadzri, Farah Aida
Format: Article
Language:English
Published: Accounting Research Institute (ARI), Universiti Teknologi MARA, Shah Alam 2023
Online Access:https://ir.uitm.edu.my/id/eprint/88837/1/88837.pdf
https://ir.uitm.edu.my/id/eprint/88837/
Tags: Add Tag
No Tags, Be the first to tag this record!
id my.uitm.ir.88837
record_format eprints
spelling my.uitm.ir.888372023-12-28T16:06:30Z https://ir.uitm.edu.my/id/eprint/88837/ Financing concentration and credit risks: empirical study on the Islamic banks in Malaysia / Abdulazeez Adewuyi Abdurraheem, Md. Mahmudul Alam and Farah Aida Ahmad Nadzri mar Abdurraheem, Abdulazeez Adewuyi Alam, Md. Mahmudul Ahmad Nadzri, Farah Aida Sectoral financing concentration in a few sectors of the economy by Islamic banks in Malaysia has become a recurring issue. The objective of this study was to examine the relationship between financing concentration and Islamic banking credit risks in Malaysia. The study employed the Hirschman-Herfindahl-Index (HHI) to investigate the sectoral concentration of the financing portfolio. Dynamic OLS Approach of Cointegration was estimated to determine the long-run relationship between financing concentration and credit risks in the Islamic banking system. The HHI indicated that Islamic banks in Malaysia held a highly concentrated financing portfolio during the period 2007-2018. The result of the Dynamic OLS Approach of Cointegration indicated the existence of the long-term relationship between the banks’ financing concentration and credit risks. Findings from the study present practical implications for policy formulation and monitoring functions of the regulatory authorities, and managers of Islamic banks in particular, to protect the interests of depositors and the financial system against the consequences of an unanticipated macroeconomic shock. The study provides new insights into financing concentration as a determinant of credit risk in Islamic banking in Malaysia using static and dynamic statistical methods. Accounting Research Institute (ARI), Universiti Teknologi MARA, Shah Alam 2023-12 Article PeerReviewed text en https://ir.uitm.edu.my/id/eprint/88837/1/88837.pdf Financing concentration and credit risks: empirical study on the Islamic banks in Malaysia / Abdulazeez Adewuyi Abdurraheem, Md. Mahmudul Alam and Farah Aida Ahmad Nadzri. (2023) Management & Accounting Review (MAR) <https://ir.uitm.edu.my/view/publication/Management_=26_Accounting_Review_=28MAR=29/>, 22 (3): 18. pp. 466-489. ISSN 2550-1895
institution Universiti Teknologi Mara
building Tun Abdul Razak Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Teknologi Mara
content_source UiTM Institutional Repository
url_provider http://ir.uitm.edu.my/
language English
description Sectoral financing concentration in a few sectors of the economy by Islamic banks in Malaysia has become a recurring issue. The objective of this study was to examine the relationship between financing concentration and Islamic banking credit risks in Malaysia. The study employed the Hirschman-Herfindahl-Index (HHI) to investigate the sectoral concentration of the financing portfolio. Dynamic OLS Approach of Cointegration was estimated to determine the long-run relationship between financing concentration and credit risks in the Islamic banking system. The HHI indicated that Islamic banks in Malaysia held a highly concentrated financing portfolio during the period 2007-2018. The result of the Dynamic OLS Approach of Cointegration indicated the existence of the long-term relationship between the banks’ financing concentration and credit risks. Findings from the study present practical implications for policy formulation and monitoring functions of the regulatory authorities, and managers of Islamic banks in particular, to protect the interests of depositors and the financial system against the consequences of an unanticipated macroeconomic shock. The study provides new insights into financing concentration as a determinant of credit risk in Islamic banking in Malaysia using static and dynamic statistical methods.
format Article
author Abdurraheem, Abdulazeez Adewuyi
Alam, Md. Mahmudul
Ahmad Nadzri, Farah Aida
spellingShingle Abdurraheem, Abdulazeez Adewuyi
Alam, Md. Mahmudul
Ahmad Nadzri, Farah Aida
Financing concentration and credit risks: empirical study on the Islamic banks in Malaysia / Abdulazeez Adewuyi Abdurraheem, Md. Mahmudul Alam and Farah Aida Ahmad Nadzri
author_facet Abdurraheem, Abdulazeez Adewuyi
Alam, Md. Mahmudul
Ahmad Nadzri, Farah Aida
author_sort Abdurraheem, Abdulazeez Adewuyi
title Financing concentration and credit risks: empirical study on the Islamic banks in Malaysia / Abdulazeez Adewuyi Abdurraheem, Md. Mahmudul Alam and Farah Aida Ahmad Nadzri
title_short Financing concentration and credit risks: empirical study on the Islamic banks in Malaysia / Abdulazeez Adewuyi Abdurraheem, Md. Mahmudul Alam and Farah Aida Ahmad Nadzri
title_full Financing concentration and credit risks: empirical study on the Islamic banks in Malaysia / Abdulazeez Adewuyi Abdurraheem, Md. Mahmudul Alam and Farah Aida Ahmad Nadzri
title_fullStr Financing concentration and credit risks: empirical study on the Islamic banks in Malaysia / Abdulazeez Adewuyi Abdurraheem, Md. Mahmudul Alam and Farah Aida Ahmad Nadzri
title_full_unstemmed Financing concentration and credit risks: empirical study on the Islamic banks in Malaysia / Abdulazeez Adewuyi Abdurraheem, Md. Mahmudul Alam and Farah Aida Ahmad Nadzri
title_sort financing concentration and credit risks: empirical study on the islamic banks in malaysia / abdulazeez adewuyi abdurraheem, md. mahmudul alam and farah aida ahmad nadzri
publisher Accounting Research Institute (ARI), Universiti Teknologi MARA, Shah Alam
publishDate 2023
url https://ir.uitm.edu.my/id/eprint/88837/1/88837.pdf
https://ir.uitm.edu.my/id/eprint/88837/
_version_ 1787139645094494208
score 13.209306