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

• Main Author: Al-Ademi, Mona Abduilalh Yousef
• Format: Thesis
• Language: English; English
• 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; https://etd.uum.edu.my/1662/

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.