We use cookies to ensure that we give you the best experience on our website. By continuing to browse this repository, you give consent for essential cookies to be used. You can read more about our Privacy and Cookie Policy.

Durham Research Online
You are in:

Nonperforming loans in the GCC banking sectors : does the Islamic finance matter?

Alandejani, M. and Asutay, M. (2017) 'Nonperforming loans in the GCC banking sectors : does the Islamic finance matter?', Research in international business and finance., 42 . pp. 832-854.


This paper investigates the bank-level and country-level factors determining nonperforming loans (NPL) in the commercial banking industry of Gulf Cooperation Council (GCC) countries. Specifically; it examines the impact of the sectoral distribution financing growth and Islamic finance methods growth on NPL. To do so, we apply generalized method of moments (GMM) techniques, over the 2005–2011 period. Our findings indicate that the sectoral distribution of Islamic financing has an adverse impact on NPL, which suggest that the sectoral financing growth of Islamic banks increases the credit risk exposure more than conventional banks. The findings of the Islamic finance methods growth show that the impact of fixed-income debt contracts could increase NPL more than profit-and-loss-sharing contracts.

Item Type:Article
Full text:(AM) Accepted Manuscript
Available under License - Creative Commons Attribution Non-commercial No Derivatives.
Download PDF
Publisher Web site:
Publisher statement:© 2017 This manuscript version is made available under the CC-BY-NC-ND 4.0 license
Date accepted:03 July 2017
Date deposited:05 September 2017
Date of first online publication:12 July 2017
Date first made open access:12 January 2019

Save or Share this output

Look up in GoogleScholar