Key Risk Determinants of Listed Deposit-Taking Institutions in Malaysia


  • Nor Hayati Ahmad Faculty of Finance and Banking, Universiti Utara Malaysia
  • Mohamed Ariff Faculty of Finance and Banking Universiti Utara Malaysia


Risk management is a critical function in banking operations in the wake of several banking crises. However, we find few studies on risk management and a lack of empirical investigation on factors affecting the risk of Malaysian banks. These gaps have motivated us to identify the main factors associated with the risk of locally listed deposit-taking institutions. The findings show that three factors were significantly associated with unsystematic risk, while the systematic risk and the total risk of these deposit-taking institutions were significantly affected by four main factors. These four factors namely non-performing loans, cost of funds, loan to deposit ratio and inter-bank offered rate however, were found to have a more profound effect on the total risk than on the systematic risk or the unsystematic risk of Malaysian deposit-taking institutions.


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How to Cite

Ahmad, N. H., & Ariff, M. (2004). Key Risk Determinants of Listed Deposit-Taking Institutions in Malaysia. Malaysian Management Journal, 8(1), 69–81. Retrieved from