Credit Performance Analysis of Al-Arafah Islami Bank PLC

Abstract

This report, titled “Credit Performance Analysis of Al-Arafah Islami Bank PLC”, evaluates the bank’s credit policies and procedures, assesses its financial performance over the last five years (2019-2023), and identifies key challenges and areas for improvement. The report aims to provide insights into the effectiveness of Al-Arafah Islami Bank's credit operations and highlight strategies to enhance its financial performance moving forward. The study begins by examining the existing credit policies and procedures of Al-Arafah Islami Bank, including its credit approval process, risk management strategies, and Shariahcompliance. It then delves into a quantitative analysis of the bank’s credit performance over the five-year period, using key financial ratiossuch as the Non-Performing Loan (NPL) ratio,Credit to Deposit Ratio (CDR), Return on Assets (ROA), and Loan Loss Provision (LLP) ratio, among others. The analysis reveals both strengths and weaknesses in the bank’s credit operations.