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This study assesses the impact of credit risk management (CRM) on the financial performance (FP) of Jordanian commercial banks, focusing on return on assets (ROA) and earnings per share (EPS). Panel regression analysis is used in the study to investigate the impact of CRM on FP in Jordan. The research examined data from all 13 banks listed on the Amman Stock Exchange (ASE), representing the sector’s full landscape. Findings reveal that effective CRM influences FP. The results highlight the necessity of balanced credit policies that optimize profitability while minimizing default risks, particularly within Jordan’s challenging economic environment. Recommendations include structured risk categorization, proactive monitoring for early detection of high-risk clients, and continuous adaptation of CRM frameworks to evolving economic and regulatory demands. These strategies are essential for sustaining growth and stability, emphasizing CRM’s pivotal role in navigating financial uncertainties and fostering sustainable bank performance.

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The Influence of Banks’ Credit Risk Management on the Financial Performance of Commercial Banks in Jordan

  • 会议论文

  • 发表日期：

    2025年

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  • Abedalqader Rababah,
  • Khalid Alqatiti,
  • Saleh F. A. Khatib,
  • Islam Alkasasbeh,
  • Rami Zeitun

摘要

This study assesses the impact of credit risk management (CRM) on the financial performance (FP) of Jordanian commercial banks, focusing on return on assets (ROA) and earnings per share (EPS). Panel regression analysis is used in the study to investigate the impact of CRM on FP in Jordan. The research examined data from all 13 banks listed on the Amman Stock Exchange (ASE), representing the sector’s full landscape. Findings reveal that effective CRM influences FP. The results highlight the necessity of balanced credit policies that optimize profitability while minimizing default risks, particularly within Jordan’s challenging economic environment. Recommendations include structured risk categorization, proactive monitoring for early detection of high-risk clients, and continuous adaptation of CRM frameworks to evolving economic and regulatory demands. These strategies are essential for sustaining growth and stability, emphasizing CRM’s pivotal role in navigating financial uncertainties and fostering sustainable bank performance.