The Relationship between Credit Risk Management and Profitability between Investment and Commercial Banks in Palestine
Date
2015-10-25
Authors
Bayyoud Mohammed
Sayyad Nermeen
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Publisher
Canadian Center of Science and Education
Abstract
This study examines the relationship between credit risk management and profitability in commercial and investment banks operating in Palestine. Using an explanatory research design, the study combines quantitative analysis based on financial statements with qualitative insights gathered through structured interviews with bank managers. Return on Equity (ROE) is employed as a measure of profitability, while the Non-Performing Loan Ratio (NPLR) represents credit risk. Regression analysis covering the period 2010–2014 reveals that credit risk does not have a statistically significant effect on profitability in either commercial or investment banks in Palestine. The findings further indicate no meaningful difference between the two types of banks regarding the relationship between credit risk management and profitability. The study highlights the role of effective credit risk management practices in mitigating potential adverse impacts on bank performance.
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Citation
Bayyoud, M., & Sayyad, N. (2015). The relationship between credit risk management and profitability between investment and commercial banks in Palestine. International Journal of Economics and Finance, 7(11), 163–169. https://doi.org/10.5539/ijef.v7n11p163