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Determinant of Islamic banking institutions' profitability in Malaysia

Starting with the establishment of the Malaysia’s first Islamic bank namely Bank Islam Malaysia Berhad (BIMB) in 1983, the Islamic banking system has shown better development and is now widely accepted by Muslims as well as non-Muslim in this country. Islamic Banking System which follows the rule of...

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Main Authors: Idris, Asma' Rashidah, Abu Hassan Asari, Fadli Fizari, Abdullah Taufik, Noor Asilah, Salim, Nor Jana, Mustaffa, Rajmi, Jusoff, Kamaruzaman
Format: Article
Language:English
Published: IDOSI Publications 2011
Online Access:http://psasir.upm.edu.my/id/eprint/44140/1/Determinant%20of%20Islamic%20banking%20institutions%27%20profitability%20in%20Malaysia.pdf
http://psasir.upm.edu.my/id/eprint/44140/
https://www.idosi.org/wasj/wasj12(BES)2011.htm
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spelling my.upm.eprints.441402020-07-09T00:35:14Z http://psasir.upm.edu.my/id/eprint/44140/ Determinant of Islamic banking institutions' profitability in Malaysia Idris, Asma' Rashidah Abu Hassan Asari, Fadli Fizari Abdullah Taufik, Noor Asilah Salim, Nor Jana Mustaffa, Rajmi Jusoff, Kamaruzaman Starting with the establishment of the Malaysia’s first Islamic bank namely Bank Islam Malaysia Berhad (BIMB) in 1983, the Islamic banking system has shown better development and is now widely accepted by Muslims as well as non-Muslim in this country. Islamic Banking System which follows the rule of Shariah plays a vital role in Malaysia as its profitability contributes to the growth of the economy. Therefore, this study was conducted in order to examine the determinants of profitability for Islamic Banking Institutions in Malaysia which are listed on the Bursa Malaysia. The bank-specific determinants (internal factors) include capital adequacy, credit risk, liquidity, bank size and management of expenses. The methodology employed is the Generalized Least Square (GLS) panel data analysis, using quarterly data from nine Islamic banks, which consist of foreign and local Islamic banks incorporated in Malaysia for the period 2007-2009. The result revealed that only the bank size is significant in determining the profitability with positive relationship. It is to be concluded then that, even though there is a lot of determining factors, only the bank’s size may put confidence in the eyes of the consumers. For the future studies, it is recommended to have a wider scope where other Malaysian Islamic financial institutions and more determinant factors can be taken into account. IDOSI Publications 2011 Article PeerReviewed text en http://psasir.upm.edu.my/id/eprint/44140/1/Determinant%20of%20Islamic%20banking%20institutions%27%20profitability%20in%20Malaysia.pdf Idris, Asma' Rashidah and Abu Hassan Asari, Fadli Fizari and Abdullah Taufik, Noor Asilah and Salim, Nor Jana and Mustaffa, Rajmi and Jusoff, Kamaruzaman (2011) Determinant of Islamic banking institutions' profitability in Malaysia. World Applied Sciences Journal, 12. pp. 1-7. ISSN 1818-4952; ESSN: 1991-6426 https://www.idosi.org/wasj/wasj12(BES)2011.htm
institution Universiti Putra Malaysia
building UPM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Putra Malaysia
content_source UPM Institutional Repository
url_provider http://psasir.upm.edu.my/
language English
description Starting with the establishment of the Malaysia’s first Islamic bank namely Bank Islam Malaysia Berhad (BIMB) in 1983, the Islamic banking system has shown better development and is now widely accepted by Muslims as well as non-Muslim in this country. Islamic Banking System which follows the rule of Shariah plays a vital role in Malaysia as its profitability contributes to the growth of the economy. Therefore, this study was conducted in order to examine the determinants of profitability for Islamic Banking Institutions in Malaysia which are listed on the Bursa Malaysia. The bank-specific determinants (internal factors) include capital adequacy, credit risk, liquidity, bank size and management of expenses. The methodology employed is the Generalized Least Square (GLS) panel data analysis, using quarterly data from nine Islamic banks, which consist of foreign and local Islamic banks incorporated in Malaysia for the period 2007-2009. The result revealed that only the bank size is significant in determining the profitability with positive relationship. It is to be concluded then that, even though there is a lot of determining factors, only the bank’s size may put confidence in the eyes of the consumers. For the future studies, it is recommended to have a wider scope where other Malaysian Islamic financial institutions and more determinant factors can be taken into account.
format Article
author Idris, Asma' Rashidah
Abu Hassan Asari, Fadli Fizari
Abdullah Taufik, Noor Asilah
Salim, Nor Jana
Mustaffa, Rajmi
Jusoff, Kamaruzaman
spellingShingle Idris, Asma' Rashidah
Abu Hassan Asari, Fadli Fizari
Abdullah Taufik, Noor Asilah
Salim, Nor Jana
Mustaffa, Rajmi
Jusoff, Kamaruzaman
Determinant of Islamic banking institutions' profitability in Malaysia
author_facet Idris, Asma' Rashidah
Abu Hassan Asari, Fadli Fizari
Abdullah Taufik, Noor Asilah
Salim, Nor Jana
Mustaffa, Rajmi
Jusoff, Kamaruzaman
author_sort Idris, Asma' Rashidah
title Determinant of Islamic banking institutions' profitability in Malaysia
title_short Determinant of Islamic banking institutions' profitability in Malaysia
title_full Determinant of Islamic banking institutions' profitability in Malaysia
title_fullStr Determinant of Islamic banking institutions' profitability in Malaysia
title_full_unstemmed Determinant of Islamic banking institutions' profitability in Malaysia
title_sort determinant of islamic banking institutions' profitability in malaysia
publisher IDOSI Publications
publishDate 2011
url http://psasir.upm.edu.my/id/eprint/44140/1/Determinant%20of%20Islamic%20banking%20institutions%27%20profitability%20in%20Malaysia.pdf
http://psasir.upm.edu.my/id/eprint/44140/
https://www.idosi.org/wasj/wasj12(BES)2011.htm
_version_ 1672612196437196800
score 13.211869

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