A Study On The Performance Of Malaysian Commercial Banks

• Main Author: Fader, Abdullah
• Format: Thesis
• Language: English; English
• Published: 2001
• Subjects: HF Commerce.
• Online Access: http://etd.uum.edu.my/274/1/Fader_bin_Abdullah%2C_2001.pdf; http://etd.uum.edu.my/274/2/1.Fader_bin_Abdullah%2C_2001.pdf; http://etd.uum.edu.my/274/

Evaluation of bank performance is important in any competitive financial market. Bank performance provides signal to depositors-investors whether to invest or withdraw funds from the bank. Similarly, it gives directions to bank managers whether to provide deposit or loan services in order to improve the performance of the bank. This study has analysed the performance of the Malaysian commercial banks for a 13 years period from 1985 to 1997. Comparison of the performances of the commercial banks was carried out between two periods; 1985 to 1990 and 1991 to 1997. Consolidated financial statements of the commercial banks have been gathered for this purpose. Six dimensions of performance were emphasized, namely earning, liquidity, risk, solvency, efficiency and profitability, of which are measured by financial ratios. T-test was used to test the significance of changes in each of these aspects of performance between the two periods. Comparative financial analysis indicates that there were significant improvements in the earning, efficiency and productivity performances of the commercial banks during 1991 to 1997. The bank's managerial efficiency in assets and liabilities has improved and has contributed to the performance during the second period. Non-interest income, loan loss provision, net interest margin and efficiency ratio have been identified as the important components that contributed to the banks' earning performance.