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  DOI Prefix   10.20431


 

International Journal of Managerial Studies and Research
Volume 2, Issue 10, 2014, Page No: 64-73

Factors Affecting Credit Risks of Malaysian Financial Institutions Post 2008-2009 Financial Crisis

Zeinab Safaei 1, Meysam Safari 2, Hamed Farahmand 3

1. Multi Media University, Malaysia
2. SEGi University, Malaysia
3. Universiti Teknologi Malaysia, Malaysia

Citation : Zeinab Safaei, Meysam Safari, Hamed Farahmand, Factors Affecting Credit Risks of Malaysian Financial Institutions Post 2008-2009 Financial Crisis International Journal of Managerial Studies and Research 2014 , 2(10) : 64-73

Abstract

This study investigates the factors that affect the credit risk in banking and finance companies in Malaysia post 2008-2009 financial crisis. Since the nature of banking business relies on the process of lending, the credit risk becomes an essential risk of the business. Results of panel data multiple regression analysis conducted over a sample of 53 banks for a period of 2 years (2010-2011), indicates that the credit risk is affected by ratio of net loans to total asset (positively), liquid assets (positively), cost to income ratio (negatively), and total capital ratio (negatively). Regulators may use these measures to monitor or control the credit risk level of banks


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