Net profit margin determinants of Islamic subsidiaries of conventional banks in Malaysia
This study investigates the determinants of Net Profit Margin (NPM) in Malaysia’s Islamic banking system for the period of 2011-2015 by using static panel data analysis. In Malaysia, conventional banks through its Islamic subsidiary banks are dominating the Islamic banking system in terms of total...
| Main Authors: | , , |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
Penerbit Universiti Kebangsaan Malaysia
2018
|
| Online Access: | http://journalarticle.ukm.my/19801/ http://journalarticle.ukm.my/19801/1/jeko_522-13.pdf |
| _version_ | 1848814935006511104 |
|---|---|
| author | Maisyarah Stapah @ Salleh, Bayu Taufiq Possumah, Nizam Ahmat, |
| author_facet | Maisyarah Stapah @ Salleh, Bayu Taufiq Possumah, Nizam Ahmat, |
| author_sort | Maisyarah Stapah @ Salleh, |
| building | UKM Institutional Repository |
| collection | Online Access |
| description | This study investigates the determinants of Net Profit Margin (NPM) in Malaysia’s Islamic banking system for the period
of 2011-2015 by using static panel data analysis. In Malaysia, conventional banks through its Islamic subsidiary banks
are dominating the Islamic banking system in terms of total assets, total loans and total deposits. Therefore this paper
attempts to investigate the impact of these Islamic subsidiaries of conventional banks towards the NPM. In relation
to that, the impact of the conventional parent banks’ Net Interest Margin (NIM) towards its Islamic subsidiary banks’
NPM is also investigated. For the first objective, the displayed results shows positive relationship indicating that the
Islamic subsidiaries of conventional banks’ NPM is higher than the full-fledge Islamic banks’ NPM. While the empirical
results on the banks’ specific variables suggest that size, risk aversion and operating cost are positively related to
NPM. However, credit risk tends to reduce NPM. Besides that, this study also finds that market concentrations and GDP
growth will influence NPM in negative ways whilst inflation and Islamic stock market developments will increase NPM.
Liquidity however is found insignificant to NPM. As for the second objective, the Islamic subsidiaries of conventional
banks’ NPM is observed as being independent from its conventional parent banks’ NIM. |
| first_indexed | 2025-11-15T00:41:59Z |
| format | Article |
| id | oai:generic.eprints.org:19801 |
| institution | Universiti Kebangasaan Malaysia |
| institution_category | Local University |
| language | English |
| last_indexed | 2025-11-15T00:41:59Z |
| publishDate | 2018 |
| publisher | Penerbit Universiti Kebangsaan Malaysia |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | oai:generic.eprints.org:198012022-09-21T06:55:08Z http://journalarticle.ukm.my/19801/ Net profit margin determinants of Islamic subsidiaries of conventional banks in Malaysia Maisyarah Stapah @ Salleh, Bayu Taufiq Possumah, Nizam Ahmat, This study investigates the determinants of Net Profit Margin (NPM) in Malaysia’s Islamic banking system for the period of 2011-2015 by using static panel data analysis. In Malaysia, conventional banks through its Islamic subsidiary banks are dominating the Islamic banking system in terms of total assets, total loans and total deposits. Therefore this paper attempts to investigate the impact of these Islamic subsidiaries of conventional banks towards the NPM. In relation to that, the impact of the conventional parent banks’ Net Interest Margin (NIM) towards its Islamic subsidiary banks’ NPM is also investigated. For the first objective, the displayed results shows positive relationship indicating that the Islamic subsidiaries of conventional banks’ NPM is higher than the full-fledge Islamic banks’ NPM. While the empirical results on the banks’ specific variables suggest that size, risk aversion and operating cost are positively related to NPM. However, credit risk tends to reduce NPM. Besides that, this study also finds that market concentrations and GDP growth will influence NPM in negative ways whilst inflation and Islamic stock market developments will increase NPM. Liquidity however is found insignificant to NPM. As for the second objective, the Islamic subsidiaries of conventional banks’ NPM is observed as being independent from its conventional parent banks’ NIM. Penerbit Universiti Kebangsaan Malaysia 2018 Article PeerReviewed application/pdf en http://journalarticle.ukm.my/19801/1/jeko_522-13.pdf Maisyarah Stapah @ Salleh, and Bayu Taufiq Possumah, and Nizam Ahmat, (2018) Net profit margin determinants of Islamic subsidiaries of conventional banks in Malaysia. Jurnal Ekonomi Malaysia, 52 (2). pp. 163-173. ISSN 0127-1962 https://www.ukm.my/jem/issue/v52i2/ |
| spellingShingle | Maisyarah Stapah @ Salleh, Bayu Taufiq Possumah, Nizam Ahmat, Net profit margin determinants of Islamic subsidiaries of conventional banks in Malaysia |
| title | Net profit margin determinants of Islamic subsidiaries of conventional banks in Malaysia |
| title_full | Net profit margin determinants of Islamic subsidiaries of conventional banks in Malaysia |
| title_fullStr | Net profit margin determinants of Islamic subsidiaries of conventional banks in Malaysia |
| title_full_unstemmed | Net profit margin determinants of Islamic subsidiaries of conventional banks in Malaysia |
| title_short | Net profit margin determinants of Islamic subsidiaries of conventional banks in Malaysia |
| title_sort | net profit margin determinants of islamic subsidiaries of conventional banks in malaysia |
| url | http://journalarticle.ukm.my/19801/ http://journalarticle.ukm.my/19801/ http://journalarticle.ukm.my/19801/1/jeko_522-13.pdf |