Abstract
The main purpose of this study is to examine the relationship between risk and performance of commercial bank in Malaysia. This study aims to investigate the impact of bank-specific factors which include liquidity risk, operational risk, and credit risk (microeconomic factors) and gross domestic product (GDP) and inflation rate (macroeconomic factors) on the performance of Malaysian commercial bank over the period of 2011 to 2015. The bank performance is measured by Return on Assets (ROA). The results imply that ratios employed in this study have different effects on the performance of bank. In this study, the findings show that only GDP has positive relationship with ROA. Four factors namely liquidity risk, operational risk, credit risk, and inflation rate have negative relationship with the ROA.
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