Open AccessBANK LENDING BEHAVIOR: EVIDENCE FROM MALAYSIAN DUAL BANKING SYSTEM
Author(s) -
Salwani Affandi,
Anis Izzati Ja’afar,
Fathiyah Ismail,
Nabilah Abdul Shukur
Publication year - 2021
Publication title -
advanced international journal of banking, accounting and finance
Language(s) - English
Resource type - Journals
ISSN - 2682-8537
DOI - 10.35631/aijbaf.38006
Subject(s) - ordinary least squares , business , financial system , dual (grammatical number) , chinese financial system , bank rate , official cash rate , islam , central bank , monetary economics , economics , monetary policy , econometrics , geography , art , literature , archaeology , china
This study investigates the internal and external factors that influence bank lending behaviors in Malaysian’s dual banking system. The final regression of 24 commercial and 15 Islamic banks using the pooled ordinary least square (POLS) method revealed that the size of the bank proxies by the logarithm of total assets as the most significant factor influencing bank lending behavior in Malaysia from 2010 to 2018. This suggests that larger banks are more diversified and have a larger pool of funds to be loaned out. Because banks rely on deposits to issue loans, the deposits received by the bank have a substantial impact on bank lending. The greater the number of deposits obtained; the more bank lending activities will occur. The data also demonstrated that commercial and Islamic bank lending behavior in Malaysia is strongly connected with deposit volume (DEPO), GDP, and bank size (SIZE).