Abstract
The main objective of the study is to analyze the impact of risk management on the sustainable growth rate of Islamic banks in Pakistan. The study include the Islamic banks operating in Pakistan. Annual reports of 4 Islamic banks were used to analyze for 8 years (2009-2016) the impact of risk management on the sustainable growth rate. Descriptive statistics, correlation and Least square dummy variable model were used to analyze the data. The results of our analysis show that the credit risk and capital adequacy ratio has significant impact on sustainable growth rate of the Islamic banks. The liquidity risk, operational risk and size of the bank do not have significant impact on sustainable growth rate of the Islamic banks. Since credit risk management has significant contribution to bank’s sustainability, the banks are advised to put more attention on credit risk management. Future studies can include conventional banks and Islamic banks from other countries for better understanding. Future studies can also compare between Islamic and conventional banks.
Keyword(s)
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