Bank-specific and macroeconomic determinants of bank performance: A comparative analysis between islamic and conventional banks in Malaysia

The aim of this study is to examine the determinants of conventional and Islamic bank performance in Malaysia. A panel data sample of 23 conventional banks and 16 Islamic banks for the period 2008 to 2015 was used. The independent variables were categorised into bank-specific factors and macroeconom...

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Main Author:	Ali, Faida Abdalla
Format:	Thesis
Language:	eng eng
Published:	2017
Subjects:	HG Finance
Online Access:	https://etd.uum.edu.my/7232/1/s820200_01.pdf https://etd.uum.edu.my/7232/2/s820200_02.pdf
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id	my-uum-etd.7232
record_format	uketd_dc
institution	Universiti Utara Malaysia
collection	UUM ETD
language	eng eng
advisor	Abdul Rahman, Nora Azureen
topic	HG Finance
spellingShingle	HG Finance Ali, Faida Abdalla Bank-specific and macroeconomic determinants of bank performance: A comparative analysis between islamic and conventional banks in Malaysia
description	The aim of this study is to examine the determinants of conventional and Islamic bank performance in Malaysia. A panel data sample of 23 conventional banks and 16 Islamic banks for the period 2008 to 2015 was used. The independent variables were categorised into bank-specific factors and macroeconomic factors. The bank-specific factors were capital adequacy, operating efficiency, asset quality, bank-size, and liquidity whereby GDP and inflation used as macroeconomic variables. The Generalized Least Square (GLS) was used for testing the hypotheses of the study. The regression results show that asset quality, operational efficiency, liquidity, bank size, GDP and inflation are significant determinants of conventional bank performance, while, capital adequacy, asset quality, operational efficiency, bank size, and GDP are significant with Islamic bank performance. It is worth to mention that asset quality is the only factor that bring the same effect to the performance of conventional and Islamic banks, which is found to be positive and statistically significant using either ROA or ROE. This study concludes that there are differences in the direction of the effects of the selected variables on the conventional and Islamic bank performance. Also, the study concludes that factors that affect conventional bank performance are not necessarily to affect Islamic bank performance
format	Thesis
qualification_name	other
qualification_level	Master's degree
author	Ali, Faida Abdalla
author_facet	Ali, Faida Abdalla
author_sort	Ali, Faida Abdalla
title	Bank-specific and macroeconomic determinants of bank performance: A comparative analysis between islamic and conventional banks in Malaysia
title_short	Bank-specific and macroeconomic determinants of bank performance: A comparative analysis between islamic and conventional banks in Malaysia
title_full	Bank-specific and macroeconomic determinants of bank performance: A comparative analysis between islamic and conventional banks in Malaysia
title_fullStr	Bank-specific and macroeconomic determinants of bank performance: A comparative analysis between islamic and conventional banks in Malaysia
title_full_unstemmed	Bank-specific and macroeconomic determinants of bank performance: A comparative analysis between islamic and conventional banks in Malaysia
title_sort	bank-specific and macroeconomic determinants of bank performance: a comparative analysis between islamic and conventional banks in malaysia
granting_institution	Universiti Utara Malaysia
granting_department	Othman Yeop Abdullah Graduate School of Business
publishDate	2017
url	https://etd.uum.edu.my/7232/1/s820200_01.pdf https://etd.uum.edu.my/7232/2/s820200_02.pdf
_version_	1747828178319048704
spelling	my-uum-etd.72322021-05-02T01:17:28Z Bank-specific and macroeconomic determinants of bank performance: A comparative analysis between islamic and conventional banks in Malaysia 2017 Ali, Faida Abdalla Abdul Rahman, Nora Azureen Othman Yeop Abdullah Graduate School of Business Othman Yeop Abdullah Graduate School of Business HG Finance The aim of this study is to examine the determinants of conventional and Islamic bank performance in Malaysia. A panel data sample of 23 conventional banks and 16 Islamic banks for the period 2008 to 2015 was used. The independent variables were categorised into bank-specific factors and macroeconomic factors. The bank-specific factors were capital adequacy, operating efficiency, asset quality, bank-size, and liquidity whereby GDP and inflation used as macroeconomic variables. The Generalized Least Square (GLS) was used for testing the hypotheses of the study. The regression results show that asset quality, operational efficiency, liquidity, bank size, GDP and inflation are significant determinants of conventional bank performance, while, capital adequacy, asset quality, operational efficiency, bank size, and GDP are significant with Islamic bank performance. It is worth to mention that asset quality is the only factor that bring the same effect to the performance of conventional and Islamic banks, which is found to be positive and statistically significant using either ROA or ROE. This study concludes that there are differences in the direction of the effects of the selected variables on the conventional and Islamic bank performance. Also, the study concludes that factors that affect conventional bank performance are not necessarily to affect Islamic bank performance 2017 Thesis https://etd.uum.edu.my/7232/ https://etd.uum.edu.my/7232/1/s820200_01.pdf text eng public https://etd.uum.edu.my/7232/2/s820200_02.pdf text eng public other masters Universiti Utara Malaysia Abduh, M., & Alias, A. (2014). Factors determine Islamic banking performance in Malaysia : A multiple regression approach. Journal of Islamic Banking and Finance, 31(Jan-March), 44-54. Abduh, M., & Idrees, Y. (2013). Determinants of Islamic banking profitability. Australian Journal of Basic and Applied Sciences, 7(2), 204–210. Abel, S. (2013). Role of banks in the economy.The herald. Retrieved 20th February 2017 from www.herald.co.zw. Abel, S., & Roux, P. Le. (2016). Determinants of banking sector profitability in Zimbabwe. International Journal of Economics and Financial Issues, 6(3), 845– 854. Achou, F. T. and Tegnuh, N. C. (2008). 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