The determinants of Islamic banking's profitability / Anis Mas Syuhada Azman

The credit crisis of 2007-2009 provided a once-in-a-lifetime opportunity for Islamic banks to establish themselves over the world. Malaysia was one of the countries that escaped the brunt of the financial crisis. The early emergence of Islamic finance, many observers think, is the explanation for this. The notion of Islamic banking was first introduced in Malaysia in 1983. Nevertheless, a parallel Islamic banking industry exists alongside conventional banks. Due to the various challenges that Islamic banks face, such as the current economic situation and the lack of sufficient capital, their profitability will be affected. High levels of credit risk, poor loan quality, insufficient or inadequate capitalization, operational efficiency, and a high degree of credit risk will all have an impact on bank profits. The objective of this paper is to examine the profitability of Islamic banks by examining the various factors that affect it. The study will then reveal the various factors that affect it. The study investigates the various factors that affect banks profitability. It is expected that these factors will lead to banks' profitability. This study aims to provide a guideline for financial analysts and policymakers in analyzing the various factors that affect the profitability of Islamic banks in Malaysia.