Determinants of net interest margin: a panel study on Malaysia’s commercial banks / Wan Rosuhaila Wan Muhamad Rusli

Net interest margin (NIM) is one of the ratios that reflect on the bank’s performance where low NIM indicates that the banks is less efficient while high NIM signifies that the bank is good in managing their operation. However, over the past few years the NIM of Malaysia’s commercial banks had recor...

Full description

Saved in:

Bibliographic Details
Main Author:	Wan Muhamad Rusli, Wan Rosuhaila
Format:	Thesis
Language:	English
Published:	2018
Subjects:	Financial management Business finance Corporation finance
Online Access:	https://ir.uitm.edu.my/id/eprint/93408/1/93408.pdf
Tags:	Add Tag No Tags, Be the first to tag this record!

id	my-uitm-ir.93408
record_format	uketd_dc
spelling	my-uitm-ir.934082024-04-03T07:41:48Z Determinants of net interest margin: a panel study on Malaysia’s commercial banks / Wan Rosuhaila Wan Muhamad Rusli 2018 Wan Muhamad Rusli, Wan Rosuhaila Financial management. Business finance. Corporation finance Net interest margin (NIM) is one of the ratios that reflect on the bank’s performance where low NIM indicates that the banks is less efficient while high NIM signifies that the bank is good in managing their operation. However, over the past few years the NIM of Malaysia’s commercial banks had recorded a downtrend. Thus, this research paper examines factors that influence NIM in Malaysia’s commercial banks using panel data set from 10 local and foreign commercial banks covering the 10-year period. The study engaged with annual time series data from 2006 to 2015. The specific determinants of NIM include size of the bank, return on asset, non-performing loan, bank’s liquidity risk and interest rate. This study uses Random Effects Model (REM) in order to investigate the relationship between the independent variables with NIM. The outcome of this study will benefit the organization especially the banks and the government as they can take a prevention steps before the NIM worsen and improve their performances. Based on the model used, the findings show that return on asset and interest rate both have positive relationship with NIM. Whereas, high liquidity risk will reduce the NIM of commercial banks. Unfortunately, non-performing loan and size of the bank are both insignificant. This study suggests that liquidity risk is the most significant factors that influence NIM. Government and the financial institutions need to act faster in order to avoid depressed economy as banking and financial industry is one of the major sources to Malaysia. 2018 Thesis https://ir.uitm.edu.my/id/eprint/93408/ https://ir.uitm.edu.my/id/eprint/93408/1/93408.pdf text en public degree Universiti Teknologi MARA, Terengganu Faculty Of Business Management Mohamad, Zuraida
institution	Universiti Teknologi MARA
collection	UiTM Institutional Repository
language	English
advisor	Mohamad, Zuraida
topic	Financial management Business finance Corporation finance
spellingShingle	Financial management Business finance Corporation finance Wan Muhamad Rusli, Wan Rosuhaila Determinants of net interest margin: a panel study on Malaysia’s commercial banks / Wan Rosuhaila Wan Muhamad Rusli
description	Net interest margin (NIM) is one of the ratios that reflect on the bank’s performance where low NIM indicates that the banks is less efficient while high NIM signifies that the bank is good in managing their operation. However, over the past few years the NIM of Malaysia’s commercial banks had recorded a downtrend. Thus, this research paper examines factors that influence NIM in Malaysia’s commercial banks using panel data set from 10 local and foreign commercial banks covering the 10-year period. The study engaged with annual time series data from 2006 to 2015. The specific determinants of NIM include size of the bank, return on asset, non-performing loan, bank’s liquidity risk and interest rate. This study uses Random Effects Model (REM) in order to investigate the relationship between the independent variables with NIM. The outcome of this study will benefit the organization especially the banks and the government as they can take a prevention steps before the NIM worsen and improve their performances. Based on the model used, the findings show that return on asset and interest rate both have positive relationship with NIM. Whereas, high liquidity risk will reduce the NIM of commercial banks. Unfortunately, non-performing loan and size of the bank are both insignificant. This study suggests that liquidity risk is the most significant factors that influence NIM. Government and the financial institutions need to act faster in order to avoid depressed economy as banking and financial industry is one of the major sources to Malaysia.
format	Thesis
qualification_level	Bachelor degree
author	Wan Muhamad Rusli, Wan Rosuhaila
author_facet	Wan Muhamad Rusli, Wan Rosuhaila
author_sort	Wan Muhamad Rusli, Wan Rosuhaila
title	Determinants of net interest margin: a panel study on Malaysia’s commercial banks / Wan Rosuhaila Wan Muhamad Rusli
title_short	Determinants of net interest margin: a panel study on Malaysia’s commercial banks / Wan Rosuhaila Wan Muhamad Rusli
title_full	Determinants of net interest margin: a panel study on Malaysia’s commercial banks / Wan Rosuhaila Wan Muhamad Rusli
title_fullStr	Determinants of net interest margin: a panel study on Malaysia’s commercial banks / Wan Rosuhaila Wan Muhamad Rusli
title_full_unstemmed	Determinants of net interest margin: a panel study on Malaysia’s commercial banks / Wan Rosuhaila Wan Muhamad Rusli
title_sort	determinants of net interest margin: a panel study on malaysia’s commercial banks / wan rosuhaila wan muhamad rusli
granting_institution	Universiti Teknologi MARA, Terengganu
granting_department	Faculty Of Business Management
publishDate	2018
url	https://ir.uitm.edu.my/id/eprint/93408/1/93408.pdf
_version_	1804889876740440064

Determinants of net interest margin: a panel study on Malaysia’s commercial banks / Wan Rosuhaila Wan Muhamad Rusli

Similar Items