Risks in banking have to be managed properly to ensure that banks can sustain in the financial industry. This paper examines the credit risk with the factors that influence risk in Islamic and conventional banking. This study highlights the relationship between credit risk and factors that affect the risks in both banking systems. The data have collected from financial statements of respective banks for a period of 9 years, starting from 2008 to 2016 and panel data analysis was used in this study. The findings of this study show that management efficiency and leverage indicate the lower efficiency and the higher debt that shows higher credit risk in both banking systems. Findings from this research contribute in enriching and enhance literature on risk management of Islamic and conventional banks. The problem of credit risk regarding regulatory requirement will decrease and this will give banks to increase their profitability and improve their financial performance.
Copyright: © 2018 The Author(s)
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