Profitability Determinants of Commercial Banks in Malaysia After the 1997 Financial Crisis

This study is conducted to investigate the profitability determinants of the commercial banks in Malaysia after 1997 Financial Crisis. The study utilized the secondary data obtained primarily from the banks web sites for eight commercial banks i. e. CIMB, Public Bank, Maybank, Affin Bank, Am Bank,...

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Main Author:	Al-Ademi, Mona Abduilalh Yousef
Format:	Thesis
Language:	eng eng
Published:	2009
Subjects:	HG Finance
Online Access:	https://etd.uum.edu.my/1662/1/Mona_Abduilalh_Yousef_Al-Ademi.pdf https://etd.uum.edu.my/1662/2/1.Mona_Abduilalh_Yousef_Al-Ademi.pdf
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id	my-uum-etd.1662
record_format	uketd_dc
institution	Universiti Utara Malaysia
collection	UUM ETD
language	eng eng
topic	HG Finance
spellingShingle	HG Finance Al-Ademi, Mona Abduilalh Yousef Profitability Determinants of Commercial Banks in Malaysia After the 1997 Financial Crisis
description	This study is conducted to investigate the profitability determinants of the commercial banks in Malaysia after 1997 Financial Crisis. The study utilized the secondary data obtained primarily from the banks web sites for eight commercial banks i. e. CIMB, Public Bank, Maybank, Affin Bank, Am Bank, RHB Bank, Citi Bank and HSBC Bank during the period from 2004 to 2008.The study following to other similar studied; incorporates some of macroeconomic variables to examine their affect on the banks profitability. The study used ROA as a dependent variable to estimate the bank’s profit. The independent variables used in the study consisted of 10 variables namely capital ratio (CAR), expenses management (EXPS), interest coverage (INC), bank size(SIZE), total deposits (DEPOSITS), total loan (LONAS), total income (TI) Base Lending Rate(BLR) and two macroeconomic variables i. e. inflation rate (INFL), and gross domestic product(GDP).Multiple regression analysis has applied to examine the significance contribution of these variables in the bank’s profitability. The results however show that only EXPS, INC, LOANS,BLR and INFL are significant at the 5% and 10% confidence level.
format	Thesis
qualification_name	masters
qualification_level	Master's degree
author	Al-Ademi, Mona Abduilalh Yousef
author_facet	Al-Ademi, Mona Abduilalh Yousef
author_sort	Al-Ademi, Mona Abduilalh Yousef
title	Profitability Determinants of Commercial Banks in Malaysia After the 1997 Financial Crisis
title_short	Profitability Determinants of Commercial Banks in Malaysia After the 1997 Financial Crisis
title_full	Profitability Determinants of Commercial Banks in Malaysia After the 1997 Financial Crisis
title_fullStr	Profitability Determinants of Commercial Banks in Malaysia After the 1997 Financial Crisis
title_full_unstemmed	Profitability Determinants of Commercial Banks in Malaysia After the 1997 Financial Crisis
title_sort	profitability determinants of commercial banks in malaysia after the 1997 financial crisis
granting_institution	Universiti Utara Malaysia
granting_department	College of Business (COB)
publishDate	2009
url	https://etd.uum.edu.my/1662/1/Mona_Abduilalh_Yousef_Al-Ademi.pdf https://etd.uum.edu.my/1662/2/1.Mona_Abduilalh_Yousef_Al-Ademi.pdf
_version_	1747827185670946816
spelling	my-uum-etd.16622022-04-21T01:55:42Z Profitability Determinants of Commercial Banks in Malaysia After the 1997 Financial Crisis 2009 Al-Ademi, Mona Abduilalh Yousef College of Business (COB) College of Business HG Finance This study is conducted to investigate the profitability determinants of the commercial banks in Malaysia after 1997 Financial Crisis. The study utilized the secondary data obtained primarily from the banks web sites for eight commercial banks i. e. CIMB, Public Bank, Maybank, Affin Bank, Am Bank, RHB Bank, Citi Bank and HSBC Bank during the period from 2004 to 2008.The study following to other similar studied; incorporates some of macroeconomic variables to examine their affect on the banks profitability. The study used ROA as a dependent variable to estimate the bank’s profit. The independent variables used in the study consisted of 10 variables namely capital ratio (CAR), expenses management (EXPS), interest coverage (INC), bank size(SIZE), total deposits (DEPOSITS), total loan (LONAS), total income (TI) Base Lending Rate(BLR) and two macroeconomic variables i. e. inflation rate (INFL), and gross domestic product(GDP).Multiple regression analysis has applied to examine the significance contribution of these variables in the bank’s profitability. The results however show that only EXPS, INC, LOANS,BLR and INFL are significant at the 5% and 10% confidence level. 2009 Thesis https://etd.uum.edu.my/1662/ https://etd.uum.edu.my/1662/1/Mona_Abduilalh_Yousef_Al-Ademi.pdf text eng public https://etd.uum.edu.my/1662/2/1.Mona_Abduilalh_Yousef_Al-Ademi.pdf text eng public masters masters Universiti Utara Malaysia Ahmad, R., Arrif, M & Skully, M. (2007). Factors determining mergers of banks in Malaysia's banking sector reform. Multinational Finance Journal. 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An Analysis of The Determinants of Commercial Banks Profitability In Malaysia. Unpublished master dissertation, University Utara Malaysia Goddard, J., Molyneux, P. & Wilso, J. (2004).The Profitability of European Banks: A Cross-Sectional And Dynamic Panel Analysis. The Manchester School 72(3) pp.1463–6786, 363–381.Gujarati, D. N (2006). Essentials of econometrics. New York: McGraw-Hill.Hair, et al. (1995). Multivariate Analysis Reading. New Jersey: Prentice-Hall, Inc.Kosmidou, K., Pasiouras, F., & Tsaklanganos, A. (2007). Domestic and multinational determinants of foreign bank profits: The case of Greek banks operating abroad. J. of Multi. Fin. Manag (17) pp. 1–15 Lu, Y., Fung, H. F. and Jiang, X. (2007). Market structure and profitability of Chinese commercial banks. The Chinese Economy 40 (5) pp. 100–113.Mamatzakis, E. C., & Remoundos, P. C. (2003). Determinants of Greek commercial banks profitability, 1989 – 2000. «SPOUDAI» 53 (1).43 Naceur, S. (2003). The Determinants Of The Tunisianbanking Industry Profitability: Panel Evidence. ERF Research Fellow Department of Finance Université Libre de Tunis.Nye, C. Y. and Kanbur M. G. (1991). An Empirical Analysis of The Performance of Licensed Finance Companies of Malaysia, University Utara Malaysia,Sintok, KedahPark, K. H., & Weber, W. L. (2005). Profitability of korean banks: Test of market structure versus efficient structure. Journal of Economics and Business (58) pp. 222–239.Pasiouras, F., & Kosmidou, K. (2007). Factors influencing the profitability of domestic and foreign commercial banks in the European Union. Research in International Business and Finance (21) pp. 222–237. Polius, T., & Samuel, W. (2002). Banking efficiency in the Eastern Caribbean Currency Union: An examination of the structure-conduct performance paradigm and the efficiency hypothesis. Money Affairs pp. 75-92.Sufian, F. (2009). Determinants of bank efficiency during unstable macroeconomic environment: Empirical evidence from Malaysia. Research in International Business and Finance (23) pp. 54–77.Working Papers Katib, M. N. (2004). Market structure and performance in the Malaysian banking industry: a robust estimation. [On-line] Available http://papers.ssrn.com/sol3/papers.cfm?abstract_id=872266 Wong, J., Fong, T., Wong, E., & Ka-fai Choi of the Research Department (2007). Hong Kong Monetary Authority Quarterly Bulletin, pp. 5-15.BNM annual report, 2008.Asian Development Bank website http://www.adb.org/Documents/Books/Key_Indicators/2008/pdf/mal.pdf Malaysian Industrial Development Authority websites:http://www.mida.gov.my/en_v2/index.php?page=banking-system http://www.mida.gov.my/en_v2/index.php?page=services-sector

Profitability Determinants of Commercial Banks in Malaysia After the 1997 Financial Crisis

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