Bank ownership and credit risk: an empirical study of Indonesian Islamic local banks

IF 2.5 Q2 BUSINESS, FINANCE

Journal of Islamic Accounting and Business Research Pub Date : 2024-04-26 DOI:10.1108/jiabr-02-2023-0069

Heri Sudarsono, M. Sholihin, A. Susamto

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Abstract

Purpose This study aims to determine the effect of bank ownership on the credit risk of Indonesian Islamic local banks (ILBs). Design/methodology/approach This study uses the system generalized method of moments (GMM) estimation technique with a sample of 155 Islamic local banks in Indonesia from 2012 to 2019. Findings The results show that commissioner board (D.COW) ownership has a negative effect on credit risk. This indicates that an increase in the number of shares of Islamic local banks owned by the commissioner board reduces credit risk. On the other hand, government ownership (D.GOW), the Sharia supervisory board (D.SOW) and the director board (D.DOW) do not affect credit risk. Practical implications The government, Sharia supervisory board and director board need opportunities to easily own more Islamic local bank shares. Therefore, the provisions regarding the share ownership rights of the government, Sharia supervisory board and director board need to be improved to increase their role in reducing credit risk. Originality/value Previous researchers have not studied the effect of government ownership, the commissioner board, the Sharia supervisory board and the ownership of directors on credit risk at the ILB in Indonesia.

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银行所有权与信贷风险：印度尼西亚伊斯兰地方银行的经验研究

目的本研究旨在确定银行所有权对印尼伊斯兰地方银行（ILBs）信贷风险的影响。研究采用系统广义矩量法（GMM）估计技术，以2012年至2019年印尼的155家伊斯兰地方银行为样本。这表明，专员委员会拥有的伊斯兰地方银行股份数量增加会降低信贷风险。另一方面，政府持股（D.GOW）、伊斯兰教法监事会持股（D.SOW）和董事局持股（D.DOW）并不影响信贷风险。因此，需要改进有关政府、伊斯兰教法监督委员会和董事局股份所有权的规定，以增强其在降低信贷风险方面的作用。原创性/价值以前的研究人员没有研究过政府所有权、专员委员会、伊斯兰教法监督委员会和董事所有权对印尼伊斯兰地方银行信贷风险的影响。

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来源期刊

Journal of Islamic Accounting and Business Research BUSINESS, FINANCE-

CiteScore

4.80

自引率

22.70%

发文量

期刊介绍： The journal provides a dynamic forum for the advancement of accounting and business knowledge based on Shari’ah and Islamic activities that have an impact on the welfare of society. JIABR publishes articles on the interplay between Islamic business ethics, accounting, auditing and governance, in promoting accountability, socio-economic justice (adl) and everlasting success (al-falah). It seeks to inform, among others, current theoretical and empirical research and practice in Islamic accounting, auditing and corporate governance, management of Islamic organizations, accounting regulation and policy for Islamic institutions, Shari’ah auditing and corporate governance, financial and non-financial performance measurement and disclosure in Islamic institutions and organizations. All styles of research, theoretical and empirical, case studies, practice-based papers and research notes that are well written and falling within the journal''s scope, are generally welcomed by the journal. Scope/Coverage Development of accounting, auditing and corporate governance concepts based on Shari’ah Socio-political influence on accounting and auditing regulation and policy making for Islamic financial institutions and organizations Historical perspectives on Islamic accounting, auditing and financial management Critical analysis on issues and challenges on accounting disclosure and measurement, Shari’ah audit and corporate governance Controls and risks in Islamic organizations Financial and non-financial performance measurement and disclosure.