The Determinants of Banking Profitability in Islamic and Conventional Banks: Evidence from Malaysia
This paper empirically examines the determinants of profitability of Islamic and conventional banks, within the Malaysian financial system, utilising data on 40 Malaysian banks over the 2010-2017 period. 16 of these are Islamic banks, 24 are conventional banks. The paper assesses whether similar det...
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| Format: | Dissertation (University of Nottingham only) |
| Language: | English |
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2018
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| Online Access: | https://eprints.nottingham.ac.uk/54700/ |
| _version_ | 1848799067574894592 |
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| author | Noor, Muhammad Sadi |
| author_facet | Noor, Muhammad Sadi |
| author_sort | Noor, Muhammad Sadi |
| building | Nottingham Research Data Repository |
| collection | Online Access |
| description | This paper empirically examines the determinants of profitability of Islamic and conventional banks, within the Malaysian financial system, utilising data on 40 Malaysian banks over the 2010-2017 period. 16 of these are Islamic banks, 24 are conventional banks. The paper assesses whether similar determinants including bank-specific and external factors affect profitability. Return on assets is employed as a proxy for profitability. Bank-specific determinants include capital adequacy, liquidity, asset quality, expenses management, non-interest earnings assets to total assets and size. External determinants include, market concentration, GDP and inflation.
Utilising a fixed-effects model, the findings indicate that internal factors (capital adequacy, asset quality, size, and expenses management) have a significant relationship with profitability for both bank types. Concerning external factors, inflation is found to be the only significant determinant. Finally, interaction effects are utilised to investigate significant differences in the determinants of profitability between both banks. Findings show that interactions between Islamic banks with capital adequacy and non-interest earnings assets to total assets are found to be significant. This portrays that differences in profitability between Islamic and conventional banks widens as these factors change. |
| first_indexed | 2025-11-14T20:29:46Z |
| format | Dissertation (University of Nottingham only) |
| id | nottingham-54700 |
| institution | University of Nottingham Malaysia Campus |
| institution_category | Local University |
| language | English |
| last_indexed | 2025-11-14T20:29:46Z |
| publishDate | 2018 |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | nottingham-547002022-11-21T16:10:13Z https://eprints.nottingham.ac.uk/54700/ The Determinants of Banking Profitability in Islamic and Conventional Banks: Evidence from Malaysia Noor, Muhammad Sadi This paper empirically examines the determinants of profitability of Islamic and conventional banks, within the Malaysian financial system, utilising data on 40 Malaysian banks over the 2010-2017 period. 16 of these are Islamic banks, 24 are conventional banks. The paper assesses whether similar determinants including bank-specific and external factors affect profitability. Return on assets is employed as a proxy for profitability. Bank-specific determinants include capital adequacy, liquidity, asset quality, expenses management, non-interest earnings assets to total assets and size. External determinants include, market concentration, GDP and inflation. Utilising a fixed-effects model, the findings indicate that internal factors (capital adequacy, asset quality, size, and expenses management) have a significant relationship with profitability for both bank types. Concerning external factors, inflation is found to be the only significant determinant. Finally, interaction effects are utilised to investigate significant differences in the determinants of profitability between both banks. Findings show that interactions between Islamic banks with capital adequacy and non-interest earnings assets to total assets are found to be significant. This portrays that differences in profitability between Islamic and conventional banks widens as these factors change. 2018-09-12 Dissertation (University of Nottingham only) NonPeerReviewed application/pdf en https://eprints.nottingham.ac.uk/54700/1/Dissertation-Final%20%28Online%29.pdf Noor, Muhammad Sadi (2018) The Determinants of Banking Profitability in Islamic and Conventional Banks: Evidence from Malaysia. [Dissertation (University of Nottingham only)] Banking Profitability Determinants |
| spellingShingle | Banking Profitability Determinants Noor, Muhammad Sadi The Determinants of Banking Profitability in Islamic and Conventional Banks: Evidence from Malaysia |
| title | The Determinants of Banking Profitability in Islamic and Conventional Banks: Evidence from Malaysia |
| title_full | The Determinants of Banking Profitability in Islamic and Conventional Banks: Evidence from Malaysia |
| title_fullStr | The Determinants of Banking Profitability in Islamic and Conventional Banks: Evidence from Malaysia |
| title_full_unstemmed | The Determinants of Banking Profitability in Islamic and Conventional Banks: Evidence from Malaysia |
| title_short | The Determinants of Banking Profitability in Islamic and Conventional Banks: Evidence from Malaysia |
| title_sort | determinants of banking profitability in islamic and conventional banks: evidence from malaysia |
| topic | Banking Profitability Determinants |
| url | https://eprints.nottingham.ac.uk/54700/ |