This Article Full Text (PDF) References Alert me when this article is cited Alert me if a correction is posted Services Email this article to a friend Similar articles in this journal Alert me to new issues of the journal Add to Saved Citations Download to citation manager Add to My Marked Citations Citing Articles Citing Articles via Scopus Google Scholar Articles by Sufian, F. Social Bookmarking                         What's this?

Factors Influencing Bank Profitability in a Developing Economy

Empirical Evidence from Malaysia

Fadzlan Sufian is an Assistant Vice President in the Khazanah Research and Investment Strategy Department, Khazanah Nasional Berhad, Level 35, Tower 2, Petronas Twin Towers, Kuala Lumpur City Centre, 50088 Kuala Lumpur, Malaysia. E-mail: fadzlan.sufian{at}khazanah.com.my; fsufian{at}gmail.com.

The present article examines the determinants of bank profitability in a developing economy. Specifically working within the Malaysian financial sector, the analysis is confined to the universe of the domestic and foreign commercial banks operating in the Malaysian financial sector during the period 2000–04. The empirical findings suggest that Malaysian banks with a higher credit risk and a higher loan concentration exhibit lower profitability level. On the other hand, banks that have a higher level of capitalization, a higher proportion of income from non-interest sources, and high operational expenses tend to exhibit higher profitability level. The results suggest that economic growth has a negative effect on Malaysian banks’ profitability, while a higher inflation rate has a positive impact on Malaysian banks’ profitability.

Global Business Review, Vol. 10, No. 2, 225-241 (2009)
DOI: 10.1177/097215090901000206


CiteULike    Complore    Connotea    Del.icio.us    Digg    Reddit    Technorati    Twitter    What's this?