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The Impact of Housing Loan/Financing on Malaysian Bank Risk Performances

Author

Listed:
  • Mohamad Yazid Isa*

    (Islamic Business School, Universiti Utara Malaysia, 06010 Sintok, Kedah, Malaysia)

  • Muhammad Arif Fadilah Ishak

    (Islamic Business School, Universiti Utara Malaysia, 06010 Sintok, Kedah, Malaysia)

  • Noriza Abd Aziz

    (Islamic Business School, Universiti Utara Malaysia, 06010 Sintok, Kedah, Malaysia)

  • Afiruddin Tapa

    (School of Economic, Finance and Banking, Universiti Utara Malaysia 06010 Sintok, Kedah, Malaysia)

Abstract

This study investigates the impact of housing loan/financing on bank risk performances in Malaysia. The data is collected from 12 commercial banks and 12 Islamic banks in Malaysia within the period of 2002-2016. Non-performing loan (NPL) and loan loss provision (LLP) are used as proxies for bank risk and they are regressed with housing loan/financing, expenses, total loan, income, gross domestic product and inflation. The results from Random and Fixed Effect models show that housing loan/financing has significant impact on the NPL and the LLP of commercial banks and Islamic banks. The results also show that even though commercial banks seem to dominate housing loan/financing market, but Islamic banks are capable to compete with commercial bank in this specific type of financing.

Suggested Citation

  • Mohamad Yazid Isa* & Muhammad Arif Fadilah Ishak & Noriza Abd Aziz & Afiruddin Tapa, 2018. "The Impact of Housing Loan/Financing on Malaysian Bank Risk Performances," The Journal of Social Sciences Research, Academic Research Publishing Group, pages 140-144:6.
    • Handle: RePEc:arp:tjssrr:2018:p:140-144
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