Credit card financing and its impact on the profitability of Malaysian Banks

Most of the banks provide standard credit cards which enable customer use as a mode of payment. In addition there are also rewards programs which allow the credit cards holder to earn several incentives of making purchases with the credit cards such as cash back reward that give the customer the cas...

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Main Author:	Wan Mohd Faris Afifi, Wan Mahmud
Format:	Thesis
Language:	eng aa aa
Published:	2018
Subjects:	HG Finance
Online Access:	https://etd.uum.edu.my/8295/1/s822047_01.pdf https://etd.uum.edu.my/8295/2/s822047_02.pdf https://etd.uum.edu.my/8295/3/s822047%20references.docx
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id	my-uum-etd.8295
record_format	uketd_dc
spelling	my-uum-etd.82952021-05-31T03:52:56Z Credit card financing and its impact on the profitability of Malaysian Banks 2018 Wan Mohd Faris Afifi, Wan Mahmud Isa, Mohamad Yazid Othman Yeop Abdullah Graduate School of Business Othman Yeop Abdullah Graduate School of Business HG Finance Most of the banks provide standard credit cards which enable customer use as a mode of payment. In addition there are also rewards programs which allow the credit cards holder to earn several incentives of making purchases with the credit cards such as cash back reward that give the customer the cash rewards. Credit card are important and being use as a part in financial and payment system. This study investigates the impact of conventional and Islamic credit cards on the bank profitability. The data consists of 12 conventional banks and 6 Islamic banks over the period from 2000 to 2016. Two profitability measures ROA and NIM will be regressed with bank specific variables which are credit card financing, total asset, total expenses, total income for the bank specific and also macroeconomic variables; GDP and CPI. The results of random and fixed effect models show that credit card financing is significantly affect the ROA and NIM for all banks. Meanwhile, credit cards significantly affect the ROA for conventional banks and also affect NIM for Islamic banks. The results implies that credit cards have significant contribution to the bank profitability. Credit card loan/financing is popular among the banking institutions due it nature that offer high return compare to the other type of loans. With the higher loan/financing rate, it is expected to contribute to the better return performance of banks ROA and NIM. With the positive relationship between credit card loan/financing and bank returns, the results propose that banks can rely on credit card loan/financing to increase their returns. 2018 Thesis https://etd.uum.edu.my/8295/ https://etd.uum.edu.my/8295/1/s822047_01.pdf text eng public https://etd.uum.edu.my/8295/2/s822047_02.pdf text aa public https://etd.uum.edu.my/8295/3/s822047%20references.docx text aa public other masters Universiti Utara Malaysia
institution	Universiti Utara Malaysia
collection	UUM ETD
language	eng aa aa
advisor	Isa, Mohamad Yazid
topic	HG Finance
spellingShingle	HG Finance Wan Mohd Faris Afifi, Wan Mahmud Credit card financing and its impact on the profitability of Malaysian Banks
description	Most of the banks provide standard credit cards which enable customer use as a mode of payment. In addition there are also rewards programs which allow the credit cards holder to earn several incentives of making purchases with the credit cards such as cash back reward that give the customer the cash rewards. Credit card are important and being use as a part in financial and payment system. This study investigates the impact of conventional and Islamic credit cards on the bank profitability. The data consists of 12 conventional banks and 6 Islamic banks over the period from 2000 to 2016. Two profitability measures ROA and NIM will be regressed with bank specific variables which are credit card financing, total asset, total expenses, total income for the bank specific and also macroeconomic variables; GDP and CPI. The results of random and fixed effect models show that credit card financing is significantly affect the ROA and NIM for all banks. Meanwhile, credit cards significantly affect the ROA for conventional banks and also affect NIM for Islamic banks. The results implies that credit cards have significant contribution to the bank profitability. Credit card loan/financing is popular among the banking institutions due it nature that offer high return compare to the other type of loans. With the higher loan/financing rate, it is expected to contribute to the better return performance of banks ROA and NIM. With the positive relationship between credit card loan/financing and bank returns, the results propose that banks can rely on credit card loan/financing to increase their returns.
format	Thesis
qualification_name	other
qualification_level	Master's degree
author	Wan Mohd Faris Afifi, Wan Mahmud
author_facet	Wan Mohd Faris Afifi, Wan Mahmud
author_sort	Wan Mohd Faris Afifi, Wan Mahmud
title	Credit card financing and its impact on the profitability of Malaysian Banks
title_short	Credit card financing and its impact on the profitability of Malaysian Banks
title_full	Credit card financing and its impact on the profitability of Malaysian Banks
title_fullStr	Credit card financing and its impact on the profitability of Malaysian Banks
title_full_unstemmed	Credit card financing and its impact on the profitability of Malaysian Banks
title_sort	credit card financing and its impact on the profitability of malaysian banks
granting_institution	Universiti Utara Malaysia
granting_department	Othman Yeop Abdullah Graduate School of Business
publishDate	2018
url	https://etd.uum.edu.my/8295/1/s822047_01.pdf https://etd.uum.edu.my/8295/2/s822047_02.pdf https://etd.uum.edu.my/8295/3/s822047%20references.docx
_version_	1747828369363304448

Credit card financing and its impact on the profitability of Malaysian Banks

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