Examining Risk-Weighted Assets (RWA) Performance after Recent Financial Crisis in Malaysian Banking System

Mohamad, Siti Nor Amira; Basah, Mohamad Yazis Ali; Aziz, Muhammad Ridhwan Ab.

doi:10.5539/ijef.v10n5p129

Cited by 3 publications

(2 citation statements)

References 5 publications

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“…Challenges with clarity, thorough recordkeeping, and information on entrepreneurial skills further exacerbate the information asymmetry in the Musharakah contract processes. Likewise, Mohamad et al (2018) stated that one of the low-level participation under this contract is credit risk which is related to capital impairment risk, which means that the capital provided by the financier may not be recovered, especially during a financial bankruptcy.…”

Section: Literature Reviews and Hypotheses Developmentmentioning

confidence: 99%

Venture Capital Strategies as Mediating Effects in Managing the Musharakah Contract for Islamic Banking: Malaysian Demand-side Perspectives

Mohamad¹,

Basah²,

Latib³

et al. 2023

IJARBSS

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The users (demand-side) of Malaysian Islamic banking uphold their behavioural intention toward their awareness of the need to comply with Riba-free banking, especially for entrepreneurs demanding venture capital strategies. Because of high risks, Musharakah contracts are deemed less preferred in Islamic banking. This study needs to examine the factors influencing the intention to apply venture capital strategies in the Musharakah contract. The data were collected through a survey of 286 respondents and were analyzed using the Structural Equation Modelling (SEM) AMOS. The results showed that subjective norms positively affect venture capital strategies and mediate intention via subjective norms. While the other factors are not significant, the findings contribute to the literature on venture capital strategies by demonstrating the drivers of behavioural intention and testing the mediating role of venture capital strategies and the integrated Theory of Reasoned Action (TRA) in the context of Islamic banking by introducing venture capital strategies as a potential driver of intention and as a mediator effect. Islamic banks in Malaysia have great potential to offer the Musharakah contract and mitigate risk by adopting venture capital strategies. The results of this study are vital in proposing the channelling of Islamic Corporate Social Responsibility (i-CSR) funds for the Musharakah contract as an initial step in applying venture capital strategies. Also, regulatory bodies and Islamic banks may benefit from the outcome, which provides insight into the factors they should consider to promote venture capital strategies in the Musharakah contract.

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Section: Literature Reviews and Hypotheses Developmentmentioning

confidence: 99%

Venture Capital Strategies as Mediating Effects in Managing the Musharakah Contract for Islamic Banking: Malaysian Demand-side Perspectives

Mohamad¹,

Basah²,

Latib³

et al. 2023

IJARBSS

View full text Add to dashboard Cite

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“…For the last ten years, Malaysia's Islamic finance industry has seen substantial growth in terms of its operations, assets, and capital, making it one of the fastest-growing Asian nations with a sophisticated financial system (Akalpler & Duhok, 2018;Mohamad et al, 2018). Although Malaysia's economy experienced a recession in 2009, data from the Economic Outlook 2021 report published by the Finance Ministry (MoF) reveals that the country's Islamic financial sector has grown, with total assets valued at RM1.03 billion and an increase in the amount of outstanding Islamic financing to RM787.8 billion.…”

Section: Introductionmentioning

confidence: 99%

Conceptualization of Islamic Spiritual Intelligence (ISI) in the Islamic Financing Adoption

Mohamad¹,

Yaakub²,

Basah³

2023

BMH

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Islamic financing is the methods and types of funding a personal or business uses which consist of sale-based and equity-based, used to carry out unique benefits and capital investments. Islamic financing research is very restricted and needs to be more developed, notably on the demand side or the consumer. This article aimed to explore the impact of Islamic Spiritual Intelligence (ISI) on the behavioural intention of Islamic financing adoption. This study uses a content analysis technique to accomplish this goal. The study is based on reading scholarly papers and related materials and is based on ISI theme theories and the use of Islamic funding. The analysis discovered that ISI has a favourable relationship with consumer behaviour regarding Islamic financing adoption.

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Evaluation of Total Risk-Weighted Assets in Islamic Banking through Fintech Innovations

Alzwi,

Jaber,

Rohuma

et al. 2024

JRFM

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The assessment of total risk-weighted assets (LTRWAs) in the banking sector is of the utmost importance. It serves as a critical component for regulatory compliance, risk management, and capital adequacy. By accurately assessing LTRWAs, banks can effectively meet regulatory requirements, efficiently allocate capital resources, and proactively manage risks. Moreover, the accurate assessment of LTRWAs supports performance evaluation and fosters investor confidence in the financial stability of banks. This study presents statistical analyses and machine learning methods to identify factors influencing LTRWAs. Data from Bahrain, Jordan, Qatar, the United Arab Emirates, and Yemen, spanning from 2010 to 2021, was utilized. Various statistical tests and models, including ordinary least squares, fixed effect, random effect, correlation, variance inflation factor, tolerance tests, and fintech models, were conducted. The results indicated significant impacts of the unemployment rate, inflation rate, natural logarithm of the loan-to-asset ratio, and natural logarithm of total assets on LTRWAs in regression models. The dataset was divided into a training group (90% of the data) and a testing group (10% of the data) to evaluate the predictive capabilities of various fintech models, including an adaptive network-based fuzzy inference system (ANFIS), a hybrid neural fuzzy inference system (HyFIS), a fuzzy system with the heuristic gradient descent (FS.HGD), and fuzzy inference rules with the descent method (FIR.DM) models. The selection of the optimal model is contingent upon assessing its performance according to specific error criteria. The HyFIS model outperformed others with lower errors in predicting LTRWAs. Independent t-tests confirmed statistically significant differences between original and predicted LTRWA for all models, with HyFIS showing closer predictions. This study provides valuable insights into LTRWA prediction using advanced statistical and machine learning techniques, based on a dataset from multiple countries and years.

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Examining Risk-Weighted Assets (RWA) Performance after Recent Financial Crisis in Malaysian Banking System

Cited by 3 publications

References 5 publications

Venture Capital Strategies as Mediating Effects in Managing the Musharakah Contract for Islamic Banking: Malaysian Demand-side Perspectives

Venture Capital Strategies as Mediating Effects in Managing the Musharakah Contract for Islamic Banking: Malaysian Demand-side Perspectives

Conceptualization of Islamic Spiritual Intelligence (ISI) in the Islamic Financing Adoption

Evaluation of Total Risk-Weighted Assets in Islamic Banking through Fintech Innovations

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