Malliya Musa - Academia.edu (original) (raw)
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Papers by Malliya Musa
Journal of Business & Financial Affairs, 2016
This paper examines the relationship between credit risk and profitability of US commercial banks... more This paper examines the relationship between credit risk and profitability of US commercial banks. We use Capital Adequacy Ratio and Non-performing Loan Ratio to measure credit risk and Return on Equity and Return on Assets to measure profitability of commercial banks. Using a sample of 83 US commercial banks for the period from December 2010 to December 2017, we estimate OLS regressions and find that credit risk has an important effect on profitability. Our results show that 1% increase in NPL decreases ROA by 0.0881% and decreases ROE by 0.141%. Our findings have important implications for bank regulators and policy makers.
Journal of Business & Financial Affairs, 2016
This paper examines the relationship between credit risk and profitability of US commercial banks... more This paper examines the relationship between credit risk and profitability of US commercial banks. We use Capital Adequacy Ratio and Non-performing Loan Ratio to measure credit risk and Return on Equity and Return on Assets to measure profitability of commercial banks. Using a sample of 83 US commercial banks for the period from December 2010 to December 2017, we estimate OLS regressions and find that credit risk has an important effect on profitability. Our results show that 1% increase in NPL decreases ROA by 0.0881% and decreases ROE by 0.141%. Our findings have important implications for bank regulators and policy makers.