Idris Mukhtar; Dr. Fauzias Mat Nor, Ainna Bint Ramli, Dr. Azrul Azlan Bin Iskandar Mirza


One of the main driver to good economy is Banking system. Without an efficient banking system, there is a risk for whole failure in the economy with the resultant consequences of high cost of living, unemployment, inflation, falling value of currencies etc. Many studies in past examines factors that effects the bank’s profitability, using both internal and external factors that affect the banks performance. However, the findings in these studies indicates a different result at different times within the same jurisdictions. This paper will close this gap by finding out the result of the internal factors that affect Malaysian Islamic and conventional banks performance during the period between 2008-2016. The study used secondary data from (Fitch connect databases) to evaluate the internal variable (CAMEL) and the return on equity (ROE) as dependent variables, Stata Econometrics software through panel data was used for analysis. The findings of the study show contrary result from the anticipated, it shows that the newly introduced long-term liquidity measured (NSFR) did not significantly affect the Malaysian Banks performance as measured by ROE. Thus, the future study should focus to find whether NSFR has effect of banks profitability through other internal of external factors (i.e. mediating/interactions effects of NSFR and banks performance). The implication of the study is twofold; first it serves as avenue for policy makers to find out more issues that leads to the 2008 financial crisis, second, researchers in the banking sectors will use it as a gap for further research in this area.

FULL TEXT PDF 1-14] DOI: 10.30566/ijo-bs/2018.284


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