Determinants of Commercial Banks’ Profitability in Malaysia

Trofimov, Ivan D. and Nazaria, Md.Aris and Kho, Jovena Ying Ying (2018) Determinants of Commercial Banks’ Profitability in Malaysia. Munich Personal RePEc Archive (MPRA). pp. 1-19.

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Official URL: https://mpra.ub.uni-muenchen.de/85598

Abstract

This study aims to examine the relationship between non-performing loans (NPLs) and commercial banks' performance in Malaysia, alongside other factors. It considers the effect of NPLs, cost efficiency and bank size on commercial banks' profitability by using panel data regression (Pooled OLS model), covering the period of 2010-2015. The findings of the study show that NPLs and cost efficiency have a significant negative relationship with commercial banks' performances in Malaysia. On the other hand, bank size is found to have a significant positive relation with commercial banks' performances in Malaysia. Several policy and strategic implications are outlined: the continuing need to manage credit risk, reduction of non-core lending activities, improvement of systems transparency, cost control, and more lenient competition and anti-trust policies. Keywords: profitability, non-performing loans, banks

Item Type: Article
Additional Information: Acknowledgment UNIMAS Special Short Term Grant F01/SpSTG/1574/2017
Uncontrolled Keywords: profitability, non-performing loans, banks, unimas, university, universiti, Borneo, Malaysia, Sarawak, Kuching, Samarahan, ipta, education, research, Universiti Malaysia Sarawak
Subjects: H Social Sciences > H Social Sciences (General)
H Social Sciences > HB Economic Theory
H Social Sciences > HF Commerce
H Social Sciences > HG Finance
Divisions: Academic Faculties, Institutes and Centres > Faculty of Economics and Business
Depositing User: Md. Aris
Date Deposited: 04 Dec 2020 08:14
Last Modified: 04 Dec 2020 08:14
URI: http://ir.unimas.my/id/eprint/33188

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