The macroeconomics factors that influencing commercial bank's profitability in Malaysia / Nurul Ana Farhana Jahurin

• Main Author: Jahurin, Nurul Ana Farhana
• Format: Student Project
• Language: English
• Published: 2017
• Subjects: Macroeconomics; Banking; Profits. Corporate profits
• Online Access: http://ir.uitm.edu.my/id/eprint/44013/1/44013.pdf; http://ir.uitm.edu.my/id/eprint/44013/

The aim of this paper is to investigate the macroeconomics factors that influenced commercial bank's profitability in Malayéia. This investigation has been done many in United Kingdom but little in Malaysia, which has little explanations about ROA The return on asset (ROA) is choose as the dependent variables in this study. There are four independent variables to be used which are growth domestic product (GDP), Inflation (INF) interest rate (INR) and money supply (MS). Quarterly basis data is gathered over the period 2005 to 2014. The data is gathered from Data World Bank, Trading Economy and Bank Negara Malaysia Data, while financial data is gathered from company financial report. A multiple linear regression is used in this study. In addition, econometric test is employed to observe the relationship of the economic variables to the return on asset (ROA) in one commercial bank which is Public Bank. Interactive software package E-view 8 would be used for testing and analysing the data collected. Moreover, the expected finding is growth gross domestic product (GDP) has significant effect with return on asset. On the other hand, inflation, interest rate and money supply have no significant effect with return on asset in commercial banks in Malaysia. The actual finding for this study are interest rate and inflation are significant relationship with the return on asset. While, gross domestic product and money supply are not significant with return on asset.