The determinants of Islamic banking profitability in Malaysia / Ahmad Haziq Ahmad Zaki

The objective of this study is to identify the determinants of Islamic Banking profitability in Malaysia. The dependent variable of this study is Return on Asset while the independent variables are Bank Size, Capital Adequacy, and Liquidity. The type of data used in this study is panel data. The sample of study consists of 5 full-fledged Islamic Banks in Malaysia and data collected cover the period from 2010 until 2015. This study employs Panel Regression Random Effect Model in order to study the relationship between those variables. The result of this study shows that Bank Size, Capital Adequacy, and Liquidity have significant relationship with profitability of Islamic Banks. The most impact in this study is Liquidity. In conclusion, it will be important determinants to use in to see the Islamic Banking Profitability in Malaysia.