The Impact of Credit Risk Management, Bank Size and Origin of Bank on Commercial Bank Performance

Abstract

The research is study on the determinants of the performance of commercial banks in Malaysia. The main purpose in this research is to determine the impact of credit risk management, bank size and origin of bank on the bank profitability. The researcher used pre-tax ROA and after-tax ROA as proxies of bank profitability. In addition, the level of non-performing loans ratio (NPLR) is the proxy for level of credit risk which related to credit risk management, while the natural logarithm of total assets is an indicator for the bank size. The findings in this study reveal that the level of NPLR does not have any significant impact to the bank profitability. The bank size showed a positive and significant relationship with the bank performance, while the dummy variable, the origin of bank has a significant effect on pre-tax ROA only.