Determinants of profitability in Malaysia Islamic banking / Anisahana Abdul Latif

This study seeks to determine the profitability of Islamic banking in Malaysia. The objective is to examine the relationship between internal and external variable towards profitability (PRO) and to investigate the most significant factors influencing profitability in Islamic banking. Using bank size (BS), capital adequacy (CA), liquidity (LIQ) as an internal variable while gross domestic product (GDP) and Inflation (INF) as an external variable. Secondary data was collected from fourteen (14) listed Islamic bank in Malaysia covering the period of 2009 until 2017 and using random effect model (REM) as a method. The result revealed that BS, GDP is significant in determining the profitability with positive relationship and INF is significant but negative relationship while CA and LIQ is negative relationship and not significant in determining the profitability.