Factors Determine Islamic Banking Performance in Malaysia: a multiple Regression Approach

Results and Discussion 

Descriptive Statistic 

Table 1 shows that within the period of 2006 to 2010, the average ROA for Islamic 

banks is 0.44% with maximum value of 2.97% and minimum value of -25.78%. Average 

ROE for Islamic banks is 15.37% with maximum of 508.13% and minimum of -33.40%. 

It should be highlighted that the maximum ROE for Islamic banks is not due to high 

profit. The number occurs because in 2006, BIMB faced huge losses and negative 

amount of reserve

1

 Thus, the ROE recorded as a positive sign. 

The average for loan loss provision to total assets is 0.52 and for NLTA is 53.01% 

which is slightly higher than conventional banks (52.13%). These figures show that both 

banks do not have much difference in focusing to their main business that is providing 

loan or financing. The average TOTA in Islamic banks is 1.67%. This perhaps because 

Islamic banks are new in the market compared to conventional banks. Therefore, the 

costs to set up Islamic banks contribute to the higher average and standard deviation for 

the TOTA. The average for SER is 10.37% and for the bank size is RM11.3 billion. The 

bank size value shows that Islamic banks had a lower market penetration as compared to 

conventional banks which has average bank size up to RM67 billion. 

Table 1. Descriptive Statistic of Variables Used for Period of 2006 - 2010 

 

Ave-rage 

Max. 

Min. 

Std. Dev. 

ROA  

0.44 

2.97 

-25.78 

3.48 

ROE  

15.37 

508.13 

-33.40 

58.50 

LLPTA 

0.52 

2.04 

-8.83 

1.18 

NLTA 

53.01 

88.28 

0.83 

17.71 

TOTA 

1,57 

29.64 

0.02 

3.35 

SER 

10.37 

77.18 

-1.70 

9.86 

BS 

11.38 

44.15 

2.91 

9.03 

                                                           

1

   

Bank Islam Malaysia Berhad Annual report 2006, 40. 

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Journal of Islamic Banking and Finance Jan.- March. 2014 

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