Determinants that influence the performance of banks in Malaysia / Nur Amalina Noor Azman

Generally, banks are very important in the economy by maintaining and motivating the development of economic sectors. They refocus the resources from those who have surplus to those which have a deficit. Consequently, the banks' performance is preferable and it is important to know what the main factors that influence this objective are. Hence, this paper examines the factors that affecting banks' performance based on 5 financial institutions for the 10 year period from 2005 to 2014. The performance is measured by return on equity. The independent variables used are liquidity risk, asset quality and capital adequacy. The objectives of this study are to identify the factors that influence the performance of banks and to examine which factor should banks focus on to optimize their performance. The data is collected from DataStream and Bank Scope of 5 listed Malaysian banks from the year 20052014. To achieve the objectives of this study, multiple linear regression analysis will be used. The result of this study is useful for banks to know the relationship of each independent variable towards the dependent variable.