The determinants of Islamic banking profitability in Malaysia / An Nur Ashraf Suhada Mohd Ali

Islamic banking is playing an important role in today's banking industry. Islamic banking has grown rapidly in Malaysia recently. There are now total 16 local Islamic bank in Malaysia. Then, the aim of this study is to increase our knowledge and understanding about the determinants that may give impact to the profitability of Islamic bank in Malaysia. Most Islamic banking research only covers the factor such as the bank reputation and services. The research about Islamic banking profitability is rarely found. So, this paper intends to contribute to the understanding of Islamic banking profitability and what is the measure of Islamic banking profitability in Malaysia. The data was taken from the Financial Statement of each banks, and the average return on asset (ROAA) ratio is used to proxy for profitability. The data that will be use is for five years latest from year 2016, year 2017, year 2018, year 2019, also year 2020. Then, dependant variable that measure the profitability of Islamic bank. Then, for independent variables, is asset quality, liquidity, operations, capital and size of the banks. In order to produce the result we are going to use multiple linear regression to achieve the objective of the research. For expected finding, we expect that some variable that had been tested have significant relationship with Islamic bank profitability.