Open AccessThe Relationship Between Credit Risk Management Practices And Profitability In Malaysian Commercial Bank`S
Author(s) -
Ali Taha Oleiwi,
Mohsin Ali,
Sarmad Hamza Jassim,
Mohammed Hayder Nadhim,
Ganama Moustapha Gueme,
Nazarudin Bujang
Publication year - 2019
Publication title -
international journal of engineering and advanced technology
Language(s) - English
Resource type - Journals
ISSN - 2249-8958
DOI - 10.35940/ijeat.e1007.0585c19
Subject(s) - profitability index , capital adequacy ratio , loan , business , credit risk , return on assets , scope (computer science) , finance , risk adjusted return on capital , actuarial science , economics , profit (economics) , computer science , financial capital , capital formation , programming language , microeconomics
This research scope looks into credit risk management and its effect on a specific group of banks with intensive commercial activity within Malaysia. Yearly reports from 8 different banks that rely on secondary data gathered from the span of 3 years (2015-2017), form the essence of this research. Return on assets (ROA) was primarily used in this research to measure profitability. Also, two credit risk measuring methods were used, loan loss provisions ratio (LLPR) and ratio of capital adequacy (CAR). From the results we deduced that commercial bank's profitability related positively to capital adequacy ratio and loan loss provision ratio. Therefore, the research calls upon the need of new management structure that optimally keep credit risk in check and boost banks profitability.