The development of the Islamic financial system during the last years is significant. A huge field of this system is the Islamic banking which is based on the Shariah law. A description of this banking mode and its main characteristics are presented in this dissertation. Furthermore, due to the fact that the non- performing loans are an important part of the banks in every country, an analysis of the credit risk in Islamic banks was conducted. This analysis tests the influence of macroeconomic and bank specific determinants in the non-performing loans of 10 Islamic banks in the Gulf Cooperation Council (GCC) countries for the period 2011-2018. Using Random Effects model it was found that the GDP, the total assets and the loan loss provisions are significant indicators and affect positively the non-performing loans. On the other hand, the inflation and the Return on Average Equity (ROAE) found to be significant but negatively related indicators with the credit risk. Regarding the capital adequacy ratio, it has negative relationship with the dependent variable, but it is not a significant indicator in this analysis.
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