Credit risk management and business intelligence approach of the banking sector in Jordan

Figures & data

Table 1. Some financial indicators of banks operating in Jordan

	% of Total Assets	% of Total Credit Facilities	% of Total Deposit	% of Total Capital	% of Shareholders’ Equity
Commercial Banks	77.76	76.69	74.86	76.47	81.66
Islamic Banks	12.79	14.99	16.72	10.97	10.81
Foreign Banks	9.45	8.32	8.42	12.56	7.53

Figure 1. Layers of the artificial neural network.

Table 2. Screening data

Target
Partition			Frequency	Percent	Valid Percent	Cumulative Percent
Validation	Valid	0	38	59.4	59.4	59.4
		1	26	40.6	40.6	100
		Total	64	100	100
Testing	Valid	0	24	34.8	34.8	34.8
		1	45	65.2	65.2	100
		Total	69	100	100
Training	Valid	0	138	38.4	38.4	38.4
		1	221	61.6	61.6	100
		Total	359	100	100

Table 3. Model summary

Training	Cross Entropy Error	63.29
	Percent Incorrect Predictions	7.0%
	Stopping Rule Used	1 consecutive step(s) with no decrease in error
	Training Time	00:00:00:471
Testing	Cross Entropy Error	19.17
	Percent Incorrect Predictions	8.7%
Holdout	Percent Incorrect Predictions	17.2%

Table 4. Classification results

Sample	Observed	Predicted
		0	1	Percent Correct
Training	0	124	14	89.9%
	1	11	210	95%
	Overall Percentage	3.6%	62.4%	93%
Testing	0	21	3	87.5%
	1	3	42	93.3%
	Overall Percentage	34.8%	65.2%	91.3%
Holdout	0	29	9	76.3%
	1	2	24	92.3%
	Overall Percentage	48.4%	51.6%	82.8%

Table 5. Independent variable importance

	Importance	Normalized Importance
Age	0.073	43.8%
Gender	0.029	16.7%
Loan Purpose	0.062	36.8%
TML	0.113	72.3%
Guarantor	0.077	48.2%
DPR	0.163	100%
Amount	0.046	29.4%
Income term	0.071	43.6%
Experience	0.059	36.2%
Nationality	0.127	78.7%
Loan period	0.098	61.3%
Interest rate	0.094	59.9%