Factors affecting the profitability of Malaysian Islamic bank / Hafika Mohamad

This study is to determine what are the factors will be effect the profitability of Islamic Banks in Malaysia for a year 2008 until 2015. The objective of this study is to identify the major factors that influences the profitability of Malaysian Islamic bank. The factors that will be measure are bank specific determinants. There are Equity to asset ratio (EAR), Loan Loss Reserves (LLR), Liquid asset to deposits and short term funding (LIQ), Cost to Income Ratio (COSR) and Bank Size. The Return on Asset is used as dependent variable to represent the bank profitability. The data collection for each variable is collected using the secondary sources which are from annual report, online database and bank scope. This research included 10 Islamic Bank in Malaysia and the period is 8 years. So that, the observation of this study is 80. The econometric model has been use in this study is panel data and contain several test to find out the result of the study. So that, based on the result of regression indicates LLR and COSR had negative relationship with significant value with ROA. So that, this research indicated COSR and LLR had big impact on the profitability of Islamic bank in Malaysia. Other than that, another independent variable had no significant with the profitability (ROA) even the result were positive but not significant.