Purpose This paper aims to investigate the adequacy of regulatory capital funds through loss provisioning policies because of worsening credit quality associated with distressed financial conditions. A financial distress occurs when banks have difficulty in honoring financial commitments. This paper is expected to unveil how the provisioning mechanisms can address concerns associated with pro cyclicality of regulatory capital funds requirements, and how the banks behave in distressed financial conditions to share risks. The pro cyclicality of regulatory capital funds is the effect of various components of the financial system that aggravates the economic cycle such as during the expansion of the economy when banks are able to provide more loans and meet regulatory capital requirements with ease, while during the contraction of the economic cycle, can lead to deterioration of asset quality, and the resultant need to make loss provisions and recognize impairment. In turn, the situation puts further pressures on the capital requirements held by banks and their risk-sharing behavior. The paper analyzes a sample of Islamic banks in Malaysia. Design/methodology/approach By estimating credit risk-related information through loss provisioning policies, the paper uses an unbalanced panel data on all Islamic banks in the Association of Islamic Banking Institutions Malaysia from 2003 to 2014. The association consists of full-fledged Islamic banks and several foreign-owned entities. Findings The paper findings support that Islamic banks during observed period of distressed financial conditions were less discouraged to increase their regulatory capital funds to share risks. Intuitively, they were more encouraged to engage in risk-shifting behavior. Also, the risk-shifting behavior was found to have a significantly high potential in foreign-owned Islamic banks than in domestic Islamic banks. Research limitations/implications Although the study is based on a sample of Islamic banks in Malaysia, the findings suggest targeted interventions aimed at discouraging risk shifting or transfer of risks in an interest-free Islamic financing. Practical implications The outcome of this paper has practical implications for Islamic banks to build a buffer of capital funds to face downward pressures during heightened financial uncertainties while serving as protection to depositors. Moreover, this study has practical implications for shareholders to avail themselves the benefits of high investment accounts financing. The Islamic banks can continue to play their role in promoting inclusive growth, reducing inequality and accelerating poverty reduction. Social implications Although the current study is based on a sample of Islamic banks in Malaysia, the finding suggests that the extent of risk shifting was significantly more incentivized among the foreign-owned rather than the domestic Islamic banks. This information can be used to develop targeted interventions aimed at discouraging risk shifting or transfer of risks in an interest-free Islamic financing. Originality/value This paper is the first that investigates on adequacy of regulatory capital funds of Islamic banks through loss provisioning policies.

Purpose This paper aims to derive determinants of loan loss provisions (LLPs) of commercial banks in Malaysia. Design/methodology/approach A single-stage panel data analysis multiple regression model that contains a mixture of quantitative and qualitative elements is used. The LLPs is a dependent variable or regressor, and non-performing loan (NPL), interest income, net profit, loans and advances and gross domestic product (GDP) are the independent variables or regressor/explanatory variables. The moderating variable is “credit risk management” (CRM) and the intervening variable is “relevance and faithful representation”. Findings This paper suggests in LLPs, NPLs, interest income, loans and advances, net profit and GDP, as well as the moderating effect of CRM and the intervening effect of relevance and faithful representation, are determinants of the LLPs. The moderating variable CRM strengthens the relationship between the independent variables and the dependent variable. The intervening variable “relevance and faithful representation” brings about a more accurate reporting on the levels of the LLPs. Practical implications The association of the factors is investigated further to detect possible effect of multicollinearity and research to better understand how banks manage their risk as the current investigation is limited to banks in Malaysia. Social implications Loan loss provisioning issues of commercial banks in Malaysia are challenges for both regulators and the banking industry owing to the implementation of several new measures, the convergence with internationally accepted accounting standards and differences in loan grading and applications of different loan loss provisioning standards. Because of these challenges, Bank Negara Malaysia (the Central Bank of Malaysia) has tightened its supervision of commercial banks to ensure that banks are sufficiently and adequately provisioned. The banking sector plays a significant role, and it is important that it is resilient in the face of potential sources of systemic risk. And, like in other major ASEAN economies, the Malaysian’s financial system remains largely bank-dominated. Originality/value This study discovers whether Malaysian banks are sufficiently provisioned for the regional financial integration under the ASEAN Capital Markets Forum (ACMF) by the end of 2015, where several initiates have been initiated, including the harmonization of standards to encourage greater intra-regional investment flows and transactions and continued provisions of the much needed funds by the region’s private sectors.

This paper determines factors influencing payments behavior of Islamic retail financing. By using data from 50 questionnaires, two (2) independent variables are tested to investigate the payments behavior. The factors are income per month and percentage of saving. The investigation towards the determining factors is important for the financial institutions to enhance the existing policy and procedure in credit processing and financing supervisions of Islamic retail financing.

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Purpose: To investigate whether present health status influence retirement planning in the new economic challenge post Covid 19. The relationship between present health status and retirement planning should be better explored and investigated for strengthening the retirement planning among Malaysian women. Design/methodology/approach: This study is developed based on a quantitative approach where primary data was acquired through online surveys to 433 workers in various locations in Malaysia. The target population of this study are people who work full time in Malaysia's government and private sectors whose ages range from 25 to 55 years old. Findings: The significant result from this study has shown that there is a health status effect on the employees' retirement planning. The result identified that the health status is an important factor for retirement planning during the post-COVID-19 among the working population in Malaysia. Research limitations/implications: Even though the COVID-19 pandemic has caused many monetary, economic and social challenges, it has also opened up a new door opportunity for constructive change. Government, policymakers and the general public need more transparent and resourceful in making difficult choices and trade-offs between short-term and long-term concerns. Nevertheless, the real challenges exposed in the COVID-19 pandemic are the lack of progressive long-term thinking on retirement planning. This paper has its limitations, that since COVID-19 is still ongoing, this study only focuses on the current present health status of Malaysian employees. Originality/value: Studying the employee's behaviour during the times of distress is important to understand how do they manage their finances. This is a valuable knowledge that could be applied in future. Many employees were caught unaware and faced challenges in the recent past. This could be avoided if prior knowledge and the savings are available.