Evaluation of Islamic Banks' Performance in Malaysia: Foreign Vs Domestic Banks

This study evaluates the performance of Islamic banks and analyzes the determinants of their profitability and performance as measured by return on assets (ROA), return on equity (ROE) and profit margin (PM). Using financial ratios as a proxy for internal bank characteristics, and utilizing bank le...

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Main Author:	Hajja, Yaman
Format:	Thesis
Language:	eng eng
Published:	2008
Subjects:	HG Finance
Online Access:	https://etd.uum.edu.my/219/1/Yaman_Hajja.pdf https://etd.uum.edu.my/219/2/Yaman_Hajja.pdf
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id	my-uum-etd.219
record_format	uketd_dc
institution	Universiti Utara Malaysia
collection	UUM ETD
language	eng eng
topic	HG Finance
spellingShingle	HG Finance Hajja, Yaman Evaluation of Islamic Banks' Performance in Malaysia: Foreign Vs Domestic Banks
description	This study evaluates the performance of Islamic banks and analyzes the determinants of their profitability and performance as measured by return on assets (ROA), return on equity (ROE) and profit margin (PM). Using financial ratios as a proxy for internal bank characteristics, and utilizing bank level data, this study examines the performance indicators of foreign and domestic Islamic banks in Malaysia during 2006-2007. Regression results show that Islamic bank profitability measures respond positively to total core deposits, and total assets; and negatively to capital adequacy ratio. Ratios of operating expenses to assets and financing provisions to total financing positively affect Islamic bank's ROE and PM, while negatively affect ROA. Regression and correlation results reveal no significant relationship between the type of Islamic bank(foreign or domestic) and the profitability measures. The t-test for equality of means results shows that domestic Islamic banks are more profitable and more efficient, but riskier and less liquid than foreign Islamic banks. Asset quality indicators for foreign Islamic banks are better than those of domestic Islamic banks.
format	Thesis
qualification_name	masters
qualification_level	Master's degree
author	Hajja, Yaman
author_facet	Hajja, Yaman
author_sort	Hajja, Yaman
title	Evaluation of Islamic Banks' Performance in Malaysia: Foreign Vs Domestic Banks
title_short	Evaluation of Islamic Banks' Performance in Malaysia: Foreign Vs Domestic Banks
title_full	Evaluation of Islamic Banks' Performance in Malaysia: Foreign Vs Domestic Banks
title_fullStr	Evaluation of Islamic Banks' Performance in Malaysia: Foreign Vs Domestic Banks
title_full_unstemmed	Evaluation of Islamic Banks' Performance in Malaysia: Foreign Vs Domestic Banks
title_sort	evaluation of islamic banks' performance in malaysia: foreign vs domestic banks
granting_institution	Universiti Utara Malaysia
granting_department	College of Business (COB)
publishDate	2008
url	https://etd.uum.edu.my/219/1/Yaman_Hajja.pdf https://etd.uum.edu.my/219/2/Yaman_Hajja.pdf
_version_	1747826863443542016
spelling	my-uum-etd.2192013-07-24T12:06:10Z Evaluation of Islamic Banks' Performance in Malaysia: Foreign Vs Domestic Banks 2008-11 Hajja, Yaman College of Business (COB) Faculty of Finance and Banking HG Finance This study evaluates the performance of Islamic banks and analyzes the determinants of their profitability and performance as measured by return on assets (ROA), return on equity (ROE) and profit margin (PM). Using financial ratios as a proxy for internal bank characteristics, and utilizing bank level data, this study examines the performance indicators of foreign and domestic Islamic banks in Malaysia during 2006-2007. Regression results show that Islamic bank profitability measures respond positively to total core deposits, and total assets; and negatively to capital adequacy ratio. Ratios of operating expenses to assets and financing provisions to total financing positively affect Islamic bank's ROE and PM, while negatively affect ROA. Regression and correlation results reveal no significant relationship between the type of Islamic bank(foreign or domestic) and the profitability measures. The t-test for equality of means results shows that domestic Islamic banks are more profitable and more efficient, but riskier and less liquid than foreign Islamic banks. Asset quality indicators for foreign Islamic banks are better than those of domestic Islamic banks. 2008-11 Thesis https://etd.uum.edu.my/219/ https://etd.uum.edu.my/219/1/Yaman_Hajja.pdf application/pdf eng validuser https://etd.uum.edu.my/219/2/Yaman_Hajja.pdf application/pdf eng public masters masters Universiti Utara Malaysia Aggarwal, R. K., & Yousef, T. (2000). "Islamic banks and investment financing". Journal of Money, Credit, and Banking, 32(1), 93 - 120. Ahmed, A.M., & Khababa, N. (1999). "Performance of the Banking Sector in Saudi Arabia", Journal of Financial Management & Analysis, 12(2), 30-36. Ainley, M. (2000). 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Evaluation of Islamic Banks' Performance in Malaysia: Foreign Vs Domestic Banks

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