Factors influencing bank profitability in a developing economy: empirical evidence from Malaysia
The present article examines the determinants of bank profitability in a developing economy. Specifically working within the Malaysian financial sector, the analysis is confined to the universe of the domestic and foreign commercial banks operating in the Malaysian financial sector during the period...
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| Format: | Article |
| Language: | English |
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Sage Publications
2011
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| Online Access: | http://irep.iium.edu.my/5183/ http://irep.iium.edu.my/5183/1/225.pdf |
| _version_ | 1848776455256801280 |
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| author | Sufian, Fadzlan |
| author_facet | Sufian, Fadzlan |
| author_sort | Sufian, Fadzlan |
| building | IIUM Repository |
| collection | Online Access |
| description | The present article examines the determinants of bank profitability in a developing economy. Specifically working within the Malaysian financial sector, the analysis is confined to the universe of the domestic and foreign commercial banks operating in the Malaysian financial sector during the period 2000–04. The empirical findings suggest that Malaysian banks with a higher credit risk and a higher loan concentration exhibit lower profitability level. On the other hand, banks that have a higher level of capitalization, a higher proportion of income from non-interest sources, and high operational expenses tend to exhibit higher profitability level. The results suggest that economic growth has a negative effect on Malaysian banks’ profitability, while a higher inflation rate has a positive impact on Malaysian banks’ profitability. |
| first_indexed | 2025-11-14T14:30:22Z |
| format | Article |
| id | iium-5183 |
| institution | International Islamic University Malaysia |
| institution_category | Local University |
| language | English |
| last_indexed | 2025-11-14T14:30:22Z |
| publishDate | 2011 |
| publisher | Sage Publications |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | iium-51832013-06-21T03:07:44Z http://irep.iium.edu.my/5183/ Factors influencing bank profitability in a developing economy: empirical evidence from Malaysia Sufian, Fadzlan HG1501 Banking The present article examines the determinants of bank profitability in a developing economy. Specifically working within the Malaysian financial sector, the analysis is confined to the universe of the domestic and foreign commercial banks operating in the Malaysian financial sector during the period 2000–04. The empirical findings suggest that Malaysian banks with a higher credit risk and a higher loan concentration exhibit lower profitability level. On the other hand, banks that have a higher level of capitalization, a higher proportion of income from non-interest sources, and high operational expenses tend to exhibit higher profitability level. The results suggest that economic growth has a negative effect on Malaysian banks’ profitability, while a higher inflation rate has a positive impact on Malaysian banks’ profitability. Sage Publications 2011-07 Article PeerReviewed application/pdf en http://irep.iium.edu.my/5183/1/225.pdf Sufian, Fadzlan (2011) Factors influencing bank profitability in a developing economy: empirical evidence from Malaysia. Global Business Review, 10 (2). pp. 225-241. ISSN 0972-1509 http://gbr.sagepub.com/content/10/2/225.short DOI: 10.1177/097215090901000206 |
| spellingShingle | HG1501 Banking Sufian, Fadzlan Factors influencing bank profitability in a developing economy: empirical evidence from Malaysia |
| title | Factors influencing bank profitability in a developing economy: empirical evidence from Malaysia |
| title_full | Factors influencing bank profitability in a developing economy: empirical evidence from Malaysia |
| title_fullStr | Factors influencing bank profitability in a developing economy: empirical evidence from Malaysia |
| title_full_unstemmed | Factors influencing bank profitability in a developing economy: empirical evidence from Malaysia |
| title_short | Factors influencing bank profitability in a developing economy: empirical evidence from Malaysia |
| title_sort | factors influencing bank profitability in a developing economy: empirical evidence from malaysia |
| topic | HG1501 Banking |
| url | http://irep.iium.edu.my/5183/ http://irep.iium.edu.my/5183/ http://irep.iium.edu.my/5183/ http://irep.iium.edu.my/5183/1/225.pdf |