ISSN: 2222-6990
Open access
This article examines Malaysian commercial bank non-performing loan causes. This study examines bank and macroeconomic factors causing non-performing loans. Eight Malaysian commercial banks are used in this study. Data from 2009–2018 annual report and FitchConnect database. Panel data was used to analyze the data. All determinants were regressed against non-performing loans using STATA 14. This study found that capitalization negatively correlated with non-performing loans and the real effective exchange rate positively correlated. This report emphasizes key non-performing loan factors for banks and financial organizations. The real effective exchange rate, a novel macroeconomic variable, is crucial for non-performing loans in this study. Thus, this study adds a variable to the model to determine what causes non-performing loans.
Azhar, N. N. Z. B. A., Ghazali, P. L. B., Mamat, M. B., Abdullah, Y. B., Mahmud, S. B., Lambak, S. B., Sulong, Z.B., Foziah, N.H.B.M. and Latif, A. Z. B. A. (2017). Acceptance of integrated modification model of auto takaful insurance in malaysia. Far East Journal of Mathematical Sciences, 101(8), 1771-1784.
CEIC Data. (2021). Malaysia Non Performing Loans Ratio.
https://www.ceicdata.com/en/indicator/malaysia/non-performing-loans-ratio
Gazali, N., Halim, N. A., & Ghazali, P. L. (2017). Alternative profit rate shariah-compliant for islamic banking. Paper presented at the Journal of Physics: Conference Series, 890(1).
Ghazali, P. L., Jaaffar, S. A. S., Foziah, N. H. M., Tambi, A. M. A., Nawi, F. A. M., Mamat, M., Mohamad S. B., Daud, W. M. N., and Mahmud, M. S. (2019). The construction of a new mathematical model for islamic home financing. Asian Academy of Management Journal, 24, 33-41.
Khemraj, T., & Pasha, S. (2009). The determinants of non-performing loans: an econometric case study of Guyana. MPRA Paper 53128, University Library of Munich, Germany.
Padachi, K., Polodoo, V., Seetah, K., Seetanah, B., and Sannassee, R. V. (2015) An Econometric Analysis Regarding the Path of Non-Performing Loans – A Panel Data Analysis from Mauritian Banks and Implications for the Banking Industry, The Journal of Developing Areas, Vol. 49, No. 1, pp. 53-64
Zain, E. N. B. M., & Ghazali, P. L. B. (2018). Non-performing loans and its implications toward Bank Performance: Comparison on Islamic and Conventional Banks. International Journal of Academic research in Business and Social Sciences, 8(12), 528-537.
Zain, E. N. M., Ghazali, P. L., & Wan Daud, W. M. N. (2020). Determinants of Non-Performing Loans: Evidence from Conventional Banks in Malaysia. Humanities & Social Sciences Reviews 8 (2), 423-430.
Zain, E. N. M., Ghazali, P. L., & Wan Daud, W. M. N. (2022). Factors Contributing to Non-performing Financing: Evidence from Islamic Banks in Malaysia before Pandemic. International Journal of Islamic Business and Management Review 2 (2), 157-162
Zulkifli, N. E., & Ahmad, Z. (2022). Nonperforming Loans in Malaysia’s Commercial Banks: Analysis of Trend and Issues. International Journal of Academic Research in Accounting Finance and Management Sciences. 12(2), 483 – 494.
(Zain et al., 2024)
Zain, E. N. M., Ghazali, P. L., & Daud, W. M. N. W. (2024). Pre- Pandemic Evidence from Conventional Banks in Malaysia on the Causes of Bank Specific Factors of Defaulting Loans. International Journal of Academic Research in Business and Social Sciences, 14(3), 51–57.
Copyright: © 2024 The Author(s)
Published by HRMARS (www.hrmars.com)
This article is published under the Creative Commons Attribution (CC BY 4.0) license. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this license may be seenavc at: http://creativecommons.org/licences/by/4.0/legalcode