International Journal of Banking and Finance

International Journal of Banking and Finance ISSN 2756-3677 Vol. 7 (2), pp. 001-009, February, 2023. © International Scholars Journals

Full Length Research Paper

Bank-specific determinants of non-performing loans in Qatar: Conventional vs Islamic Banks

Muhannad A. Almuraikhi

College of Islamic Studies, Hamad Bin Khalifa University, Qatar Foundation, Doha 34110, Qatar. email:

Accepted 31 January, 2023 


To achieve stability in the banking sector, non-performing loans (NPLs) growth must be kept relatively low. Some bank-level factors signal the NPL situation of a bank, and studies in this area within the Qatari economy are limited. This study investigate bank-specific factors that determine the rate of NPLs and control for some macroeconomic variables in Qatar. This was done using quarterly data from listed sample of Islamic and conventional banks within Q42017-Q32022. The factors considered in the study include loan growth, profitability, income diversification, capital adequacy, efficiency, and bank-type dummy. The study also controlled for money supply and oil prices. The estimations were done by applying the OLS regression modelling approach. The results show that loan growth and ROA (Return on asset) significantly have negative impact on NPLs. This indicates that the profitability and loan growth of the banks in Qatar will decrease when the NPL rate increases. Also, the level of NPLs increase is influenced by the money supply within the Qatari economy. Finally, there is no significant difference between bank-specific determinants of NPLs between Conventional and Islamic banks in Qatar. The findings imply that policymakers should put measures in place to ensure that profitability and loan growth are monitored to achieve low NPL for the sustainability of the banking sector in Qatar.

Keywords: NPLs; NPL; Borrower Default, Stability, Islamic banks.