{"id":4548,"date":"2021-06-14T01:43:04","date_gmt":"2021-06-13T17:43:04","guid":{"rendered":"https:\/\/www.ukm.my\/jem\/?post_type=article&#038;p=4548"},"modified":"2021-09-09T12:29:55","modified_gmt":"2021-09-09T04:29:55","slug":"net-profit-margin-determinants-of-islamic-subsidiaries-of-conventional-banks-in-malaysia","status":"publish","type":"article","link":"https:\/\/www.ukm.my\/jem\/article\/net-profit-margin-determinants-of-islamic-subsidiaries-of-conventional-banks-in-malaysia\/","title":{"rendered":"Net Profit Margin Determinants of Islamic Subsidiaries of Conventional Banks in Malaysia"},"content":{"rendered":"<p><span class=\"fontstyle0\">This study investigates the determinants of Net Profit Margin (<\/span><span class=\"fontstyle0\">NPM<\/span><span class=\"fontstyle0\">) in Malaysia\u2019s Islamic banking system for the period of 2011-2015 by using static panel data analysis. In Malaysia, conventional banks through its Islamic subsidiary banks are dominating the Islamic banking system in terms of total assets, total loans and total deposits. Therefore this paper attempts to investigate the impact of these Islamic subsidiaries of conventional banks towards the <\/span><span class=\"fontstyle0\">NPM<\/span><span class=\"fontstyle0\">. In relation to that, the impact of the conventional parent banks\u2019 Net Interest Margin (<\/span><span class=\"fontstyle0\">NIM<\/span><span class=\"fontstyle0\">) towards its Islamic subsidiary banks\u2019 <\/span><span class=\"fontstyle0\">NPM <\/span><span class=\"fontstyle0\">is also investigated. For the first objective, the displayed results shows positive relationship indicating that the Islamic subsidiaries of conventional banks\u2019 <\/span><span class=\"fontstyle0\">NPM <\/span><span class=\"fontstyle0\">is higher than the full-fledge Islamic banks\u2019 <\/span><span class=\"fontstyle0\">NPM<\/span><span class=\"fontstyle0\">. While the empirical results on the banks\u2019 specific variables suggest that size, risk aversion and operating cost are positively related to <\/span><span class=\"fontstyle0\">NPM<\/span><span class=\"fontstyle0\">. However, credit risk tends to reduce <\/span><span class=\"fontstyle0\">NPM<\/span><span class=\"fontstyle0\">. Besides that, this study also finds that market concentrations and <\/span><span class=\"fontstyle0\">GDP <\/span><span class=\"fontstyle0\">growth will influence <\/span><span class=\"fontstyle0\">NPM <\/span><span class=\"fontstyle0\">in negative ways whilst inflation and Islamic stock market developments will increase <\/span><span class=\"fontstyle0\">NPM<\/span><span class=\"fontstyle0\">. Liquidity however is found insignificant to <\/span><span class=\"fontstyle0\">NPM<\/span><span class=\"fontstyle0\">. As for the second objective, the Islamic subsidiaries of conventional banks\u2019 <\/span><span class=\"fontstyle0\">NPM <\/span><span class=\"fontstyle0\">is observed as being independent from its conventional parent banks\u2019 <\/span><span class=\"fontstyle0\">NIM<\/span><span class=\"fontstyle0\">.<\/span><\/p>\n","protected":false},"template":"","tags":[754,753,755,756],"jel-code":[],"article-type":[1329],"class_list":["entry","author-jem","post-4548","article","type-article","status-publish","tag-islamic-bank","tag-net-profit-margin","tag-parent-bank","tag-subsidiary-bank","article-type-normal-article"],"_links":{"self":[{"href":"https:\/\/www.ukm.my\/jem\/wp-json\/wp\/v2\/article\/4548","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.ukm.my\/jem\/wp-json\/wp\/v2\/article"}],"about":[{"href":"https:\/\/www.ukm.my\/jem\/wp-json\/wp\/v2\/types\/article"}],"version-history":[{"count":3,"href":"https:\/\/www.ukm.my\/jem\/wp-json\/wp\/v2\/article\/4548\/revisions"}],"predecessor-version":[{"id":6439,"href":"https:\/\/www.ukm.my\/jem\/wp-json\/wp\/v2\/article\/4548\/revisions\/6439"}],"wp:attachment":[{"href":"https:\/\/www.ukm.my\/jem\/wp-json\/wp\/v2\/media?parent=4548"}],"wp:term":[{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.ukm.my\/jem\/wp-json\/wp\/v2\/tags?post=4548"},{"taxonomy":"jel-code","embeddable":true,"href":"https:\/\/www.ukm.my\/jem\/wp-json\/wp\/v2\/jel-code?post=4548"},{"taxonomy":"article-type","embeddable":true,"href":"https:\/\/www.ukm.my\/jem\/wp-json\/wp\/v2\/article-type?post=4548"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}