Bank Berhad Research Articles

Corporate Governance and Its Determinants: A Study on CIMB Bank Berhad

Corporate Governance and Its Determinants: A Study on CIMB Bank Berhad

Corporate Governance and Its Determinants: A Study on Public Bank Berhad Malaysia

Corporate Governance and Its Determinants: A Study on Public Bank Berhad Malaysia

Corporate Governance and Its Determinants: A Study on Malayan Banking Berhad

Corporate Governance and Its Determinants: A Study on Malayan Banking Berhad

See Leong Chye @ Sze Leong Chye v United Overseas Bank (Malaysia) Berhad & Other Appeals: A Forced Marriage of Original Proprietor and Subsequent Chargee

Deferred indefeasibility is one of the most important concepts in the Malaysian Torrens System. Under the doctrine of deferred indefeasibility, when there exist vitiating factors in the immediate transaction, the immediate purchaser will acquire a voidable title in contrast with the subsequent purchaser who will acquire good title or interest if he obtains the title or interest in good faith and with valuable consideration. However, whether a purchaser is immediate or subsequent depends on the construction of section 340 of the National Land Code (Revised 2020). In 2021, the Federal Court laid down the decision of See Leong Chye @ Sze Leong Chye v United Overseas Bank (Malaysia) Berhad & Other Appeals which states that the financial institution which acquired interest from an immediate purchaser was a subsequent purchaser, thereby enjoyed indefeasibility in its charge. However, such an interpretation ran afoul of section 340 of the National Land Code. This article provides a commentary on the case of See Leong Chye in respect of the concept of immediate and subsequent purchasers under the doctrine of deferred indefeasibility.

A Mcdm-Based Model of Malaysian Commercial Bank Performance Prior to and During Covid-19

This study aims to propose the integrated Analytic Hierarchy Process (AHP) with Technique for Order of Preference by Similarity to the Ideal Solution (TOPSIS), VlseKriterijumska Optimizacija I Kompromisno Resenje (VIKOR), and Preference Ranking Organization Method for Enrichment Evaluations II (PROMETHEE II) to calculate the performance of commercial banks in Malaysia before and during covid-19. The information was taken from the financial statements of eight commercial banks in Malaysia for the years 2018 through 2021. Return on Assets (ROA), Return on Equity (ROE), Earnings per Share (EPS), Liquidity, Total Liabilities, and Total Equity are six selected criteria used to evaluate the overall performance of commercial banks. Malayan Banking Berhad (MBB) had the best performance among Malaysian commercial banks, according to the findings of the research. The AHP-VIKOR and AHP-PROMETHEE II methods demonstrated that Malayan Banking Berhad remained number one for four years. Using the TOPSIS methodology, Malayan Banking Berhad is also ranked first for the years 2020 and 2021. In contrast, Alliance Bank had the worst performance among Malaysian commercial banks. Using the AHP-VIKOR and AHP-PROMETHEE II methods, Alliance Bank's ranking has remained unchanged from 2018 to 2021. In addition, the AHP-TOPSIS method only recorded Alliance Bank in last place for 2018 and 2019. The final trend results for the eight commercial banks in AHP-VIKOR and AHP-PROMETHEE II are virtually identical.

PERFORMANCE ANALYSIS OF SHARIA AND CONVENTIONAL BANKS WITH MAQASHID SHARIA: CASE STUDY OF INDONESIA AND MALAYSIA IN 2016-2020

This study examines the 2016-2020 performance of Islamic and conventional banks in Indonesia and Malaysia that were chosen using the Maqashid Sharia methodology. The data analysis technique employed the simple additive weighting method (SAW) in the weighing process, as well as an aggregation and sampling technique with purposive sampling and data sources from each bank’s annual report. Imam Abu Zahrah’s Maqashid Sharia approach as a measuring tool and by adding the Salah variable as a new-Sharia goal, in addition to Tahdzib al-Fard, Iqamah al-’All, and Jalb al-Maslahah are novel aspects of this research. The Maqashid Sharia approach is a novel method for measuring performance. Financial ratio approaches, such as return on asset (ROA), return on equity (ROE), etc., have dominated banks’ performance measurement methods. The study reveals the following Maqashid Syariah Index (IMS) rankings for Islamic and conventional banks in Indonesia and Malaysia: With a score of 0.281348, Bank Muamalat Malaysia Berhad occupies the first place. Bank Islam Malaysia Berhad was in second place with a score of 0.249451. Bank Negara Indonesia Syariah ranks third with a score of 0.213718. Hong Leong Bank Berhad ranked it fourth with a score of 0.192773. Maybank Islamic Berhad was ranked fifth with a score of 0.191428. RHB Bank Berhad was ranked sixth with a score of 0.190791. The Sharia National Pension Savings ranked seventh with a score of 0.165967. With a score of 0.156738, Bank Syariah Mandiri occupies the eighth position. The ninth position is held by Affin Islamic Bank Berhad, followed by Bank Rakyat Indonesia in tenth place with a score of 0.055160.

PERFORMANCE ANALYSIS OF SHARIA BANKING IN INDONESIA AND MALAYSIA USING THE SHARIA MAQASHID INDEX CONCEPT (Comparative Study on Sharia Banking in Indonesia and Malaysia 2015-2019 Period)

Abstract: This study aimed to know whether or not there are significant differences between Indonesian’s and Malaysian’s Sharia banks and analyze the performance based on the concept of Maqashid Syariah using SMI (Sharia Maqashid Index) Value. This study is used data from financial report and annual report which were provided by each Islamic Bank sample. The whole samples is consist of 6 Sharia banks in Indonesia and 9 Sharia banks in Malaysia using purposive sampling methods. The total observation is 75 during five years period (2015-2019). The analytical method in this study is Descriptive Test, Normality Test, Homogeneity Test, and Different Test. Based on the results of the study, it can be concluded that the highest-ranking performance of Sharia banking in Indonesia is achieved by BTPN Syariah and the highest-ranking performance of Sharia banking in Malaysia is achieved by CIMB Islamic Bank Berhad. The result of this study showed that SMI Values in Indonesian’s Sharia banking were significantly different to Malaysia’s Sharia banking.
 Keywords: Maqashid Sharia, Banking Performance, Sharia Banking, Sharia Maqashid Index, Indonesia, Malaysia

Technical Efficiency of Development Financial Institutions in Malaysia

This study aims to identify the technical efficiency of Development Financial Institutions (DFIs) in Malaysia with the selected inputs of fixed asset and labour. Meanwhile, the output used in the study is financing. DFI is an institution that plays an important role in socio-economic development under the supervision of Bank Negara Malaysia (BNM). Using annual data from 2009 to 2018, technical efficiency is analysed using Data Envelopment Analysis (DEA) on the ten institutions selected in the DFIs. DEA results show that Sabah Development Bank Berhad (SDB) is the only institution considered as the most efficient. The rest of DFIs in the sample were deemed technical inefficient. The results also indicate that inefficient institutions including those with the lowest performance which are Credit Guarantee Corporation (CGC), Bank Pertanian Malaysia Berhad (Agrobank) and Bank Simpanan Nasional (BSN) have inefficient management in resource utilisation. Thus, activities in the operation of DFIs need to follow the law of return to scale for input and output orientation so that resources can be managed efficiently.

ADVANCEMENT AND SETBACK IN ISLAMIC BANKING PRODUCTIVITY IN ASEAN: DO TECHNOLOGICAL CHANGES MATTER?

This study applies the Banker, Charnes and Cooper (BCC) model as a basic approach to the data envelopment analysis used to measure the level of productivity of 24 Islamic banks in four ASEAN countries (Indonesia, Malaysia, Brunei Darussalam and Thailand) over the 2010-2019 period. The Malmquist index was also employed, which is intended to accommodate improvements in efficiency, together with advancementsin technology. According to the Malmquist index scores on total factor productivity (TFP) change, 17 of the 24 Islamic banks (or 70.8 percent) achieved an improvement in productivity over the research period, with Thailand recording the highest productivity level increase. Overall, the most productive Islamic bank was Affin Islamic Bank Berhad. Finally, it was observed that there was a productivity growth in the last two years of the period, namely 2017-2018 and 2018-2019. The productivity change was driven more by efficiency than by technology, implying that Islamic banks in ASEAN countries must improve this aspect.

Determinants of Credit Risk: Evidence From Commercial Banks in Malaysia

The purpose of this study is to determine the relationship between microeconomic factors with credit risk among selected commercial banks in Malaysia. For this purpose, a sample of seven out of 27 commercial banks in Malaysia was selected and the microeconomic factors affecting credit risk with six measurements of return on asset (ROA), bank size, leverage, the ratio of capital, interest income and return on equity (ROE) were examined by applying Panel Regression Fixed Effect (FE) Model for a period 20 years from 1998 to 2017. The scope of the study covers seven selected commercial banks in Malaysia namely: Affin Bank Berhad, Alliance Bank Malaysia Berhad, CIMB Bank Berhad, Hong Leong Bank Berhad, Malayan Banking Berhad, Public Bank Berhad and RHB Bank Berhad. This study is using credit risk proxy by non-performing loan for dependent variable while independent variables that have been selected were returned on asset (ROA), bank size, leverage, the ratio of capital, interest income and return on equity (ROE). The findings of the study managed to reject the null hypothesis for return on asset, bank size, leverage, interest income and return on equity which indicates the five microeconomic variables give a significant relationship with credit risk. There are positive relationships between leverage, interest income and return on equity with credit risk while return on asset, bank size and ratio of capital are negatively related to credit risk. However, the study fails to find any significant relationship between the ratio of capital and credit risk for commercial banks in Malaysia.

Double Taxation Treaty Interpretation: Lessons from a Case Down Under

In the Australian case of Bywater Investments Ltd v Commissioner of Taxation; Hua Wang Bank Berhad v Commissioner of Taxation (the Bywater case) the Australian High Court dealt with the question of whether certain companies were resident in Australia for income tax purposes. The majority answered this question by applying Australian domestic law. In a separate but concurring judgement, Gordon J also discussed the interpretation and application of the relevant double taxation treaty. This contribution analyses Gordon J's judgment to extract guidance from it for the South African courts on their interpretation of double taxation treaties.
 It is submitted that South African courts should also follow the "first step" proposed by Gordon J when interpreting double taxation treaties. South African courts may find Gordon J's judgment "instructive" when dealing with the interpretation of the "place of effective management" concept in both domestic law and double taxation treaties. In his judgment Gordon J favours the goal of common interpretation and it is argued that South African courts should follow this example and explicitly support this notion in applicable cases. From Gordon J's judgment and the judgement in Krok v Commissioner, South African Revenue Service, it is deduced that the positions in South Africa and Australia are similar in that the courts in both countries will be bound by the principles of Articles 31 and 32 of the Vienna Convention on the Law of Treaties when interpreting double taxation treaties. Moreover, Gordon J's judgment indicates that the domestic principles of interpretation should not be used in the interpretation of double taxation treaties. Recent South African cases have suggested that there are no differences between the South African domestic principles of interpretation and those contained in Articles 31 and 32 of the Vienna Convention on the Law of Treaties. This contribution submits that there are many similarities between the two, but that the rules are not exactly the same. South African courts should be aware of these differences and rather apply the rules of public international law, including those contained in the Vienna Convention on the Law of Treaties, when they interpret double taxation treaties. Gordon J specifically identifies the category of the Vienna Convention on the Law of Treaties in which he places the Commentary on the OECD Model Tax Convention, to rely on it for his interpretation of the relevant double taxation treaty. South African courts may well learn from this approach, to create more certainty in the process of interpreting a double taxation treaty.

Robust Hybrid Optimization Method to Reduce Investment Portfolio Risk Using Fusion of Modern Portfolio Theory and Genetic Algorithm

Main objective of this study is to develop hybrid optimization method for reducing investment portfolio risk. The methods selected in this study are the combination of Modern Portfolio Theory (MPT) and genetic algorithm optimization approach. Three stocks from Malaysian Stock Exchange are selected in developing the investment portfolio namely Malayan Banking Berhad, Hap Seng Consolidated Berhad and Top Glove Corporation Berhad. Result indicates the modern portfolio theory can give optimal portfolio weightage with maximum return for tolerate level of investment risk. In addition, genetic algorithm enhanced the optimal searching method to find global minimum of investment risk. Result shows the minimum portfolio risk in objective function is 2.122118 with implementation genetic algorithm optimization. The optimal combination of portfolio investment is 32.24 % in asset A (Malayan Banking Berhad), 52.37 % in asset B (Hap Seng Consolidated Berhad), and 15.30 % in asset C (Top Gove Corporation Berhad). The important of this study is it will assist investor in making better decision to optimize their return for given level of investment risk. Furthermore, this hybrid method provides a better accuracy of prediction for return of investment and portfolio risk.

Risk Management in Musyarakat Mutanaqisat Home Financing Contract: Analysis in Rhb Islamic Bank Berhad and Affin Islamic Bank Berhad

The Musyarakat Mutanaqisat financing contract in Malaysia is still inadequate compared to other countries such as those in the Middle East. In Malaysia, there are 10 Islamic local banks comprise of Affin Islamic Bank Berhad, Maybank Islamic Berhad, CIMB Islamic Bank Berhad, Hong Leong Islamic Bank Berhad, RHB Islamic Bank Berhad and others. As for now, only two local banks in Malaysia offer the Musyarakat Mutanaqisat home financing contract. The banks are Affin Islamic Bank Berhad & RHB Islamic Bank Berhad. Musyarakat Mutanaqisat home financing contract is less favoured by local banks in Malaysia because it brings higher risk compared to other home financing contracts (Mahmood Muhammad, 2014). The high risk has to be borne by the banks especially due to the sharing element in Musyarakat Mutanaqisat home financing contract (Rulindo, 2009). Is this statement true? If so, what are the actions that banks need to take in order to control these risks? This article aims to identify, analyse, and summarise the risk management in the implementation of Musyarakat Mutanaqisat home financing contract in Malaysia. A total of four informants includes the informants from Affin Islamic Bank Berhad and RHB Islamic Bank Berhad as well as two academic experts in the field of Islamic banking are involved in the discussion of risk management in the Musyarakat Mutanaqisat home financing contract. Purposive sampling method is used in this study with the semi-structured interview being conducted with the informants. The findings of this study comprise of discussions on the types of risks inherent in the Musyarakat Mutanaqisat home financing contract. The risks consist of credit risk, liquidity risk, Syariah risk, operational risk and investment equity risk. The risk management of the Musyarakat Mutanaqisat home financing contract by Islamic banking institutions includes three stages namely the early stage of the agreement, the current stage of the agreement and the final stage of the agreement.

Optimization on the financial management of the bank with goal programming model

Financial management is crucial for planning bank’s asset and liabilities while taking consideration for multiple objectives. The objective of this study is to develop a Goal Programming (GP) model to optimize the financial management of Public Bank Berhad in Malaysia. Six goals from the financial statements namely total asset, total liability, total equity, profit, earning and optimum management items are investigated for the period from 2011 to 2015. The results of this study indicate that all six goals are fully achieved by using the GP model. This study is significant because it helps to develop a mathematical model to examine the financial strengths of Public Bank Berhad in Malaysia. Besides that, the potential improvement on liability, equity, profit, earning and optimum management item of Public Bank Berhadcan be identified in this study based on the deviation from the target value. Keywords : Asset; Liability; Equity; Profit; Earning; Optimum Management Items

Qualitative Study of Profit Margin Determinants and Pricing Practices: An Islamic Banking Perspective

The purpose of this study is to investigate and validate the determinants of profit margins and pricing practices of Islamic banking institutions in Malaysia. The key determinants and pricing approaches were extracted using a verbal protocol followed by probing of respondents. Focus group interviews were conducted with Islamic banking experts from Bank Muamalat Malaysia Berhad, CIMB Islamic Bank Berhad, Bank Islam Malaysia Berhad and Maybank Islamic Berhad. Preliminary analysis suggested some distinct outcomes in the identification of determinants and practices in pricing and bank margins for future research. This study has provided important insights for Islamic banks to improve their bank margins and profit by considering significant variables affecting profitability. Generally, the themes which emerged from the interviews concurred with findings from literature. However, the determinants that have yet to be captured in the literature are marketing strategies which include product risk, financing terms and conditions; and discretionary power. Awareness of Islamic banking products and cost of fund strategies are other important determinants of bank margins and profitability. This paper also has the potential to enhance bank margin determinants, concept, theory and practice.

Analysis of Islamic Banking Efficiency Using Maqashid Shariah Approach (Study on Islamic Banks in Indonesia and Malaysia)

Objective - This research aims to analyse the efficiency of Islamic banking in Indonesia and Malaysia based on the maqashid shariah approach. Methodology/Technique - This research uses individual education, creation of justice, and achievement of welfare to measure the efficiency variable. The research period covers the period from 2011 to 2015, using data envelope analysis (DEA). Findings - The result show that there are three (3) Islamic banks that achieve maximum efficiency in Malaysia. These are: Affin Islamic Bank Berhad, which achieved maximum efficiency in terms of distribution and profitability output, CIMB Islamic Bank, which achieved maximum efficiency in terms of distribution output, and RHB Islamic Bank Berhad, which achieved maximum efficiency in terms of distribution output. Meanwhile, two (2) Islamic banks which were considered to be efficient, although not at the maximum level. Novelty - This study shows that Bank Panin Syariah achieves maximum efficiency with respect to distribution output, and that Bank Mega Syariah is considered efficient with respect to profitability output and personal revenue output. Type of Paper - Empirical Keywords: Islamic Banks; Efficiency; Maqashid Shariah; DEA; Indonesia; Malaysia. JEL Classification: G20, G21.

Central Management and Control and the Bywater Case: A Quantum Leap or Clarification of the Status Quo?

In this article, the author examines the outcome in the recent Australian High Court case, Bywater Investments Ltd v. Commissioner of Taxation; Hua Wang Bank Berhad v. Commissioner of Taxation, and contrasts it with earlier court decisions on the meaning of central management and control to ascertain whether the Bywater decision is a major step forward in jurisprudence determining the place of corporate residence, or merely a reaffirmation of the approach taken in the earlier cases. The article also canvasses evidentiary matters concerning the independence of board decision making and the meaning of carrying on a business in the context of passive investment entities.

Performance and Size: Empirical Evidence from Public Bank Berhad

Performance and Size: Empirical Evidence from Public Bank Berhad

Location of Board Meetings Insufficient To Determine Place of Central Management and Control

This case note explains the High Court of Australia’s November 2016 decision in Bywater Investments Limited v. Commissioner of Taxation; Hua Wang Bank Berhad v. Commissioner of Taxation, concerning the application of the central management and control test to determine corporate residence in Australia. It also canvasses the salient points of the earlier decisions of the Federal Court of Australia and the Full Federal Court of Australia, which were upheld by the High Court.

An Exploratory Study of the Rhetoric in CSR Reports: A Comparison of Shari’ah Compliant Company and Non –Shari’ah Compliant Company in Malaysia

This paper advances previous research in corporate social reporting (CSR) by using a taxonomy of five distinct rhetorical strategies to examine any differences in term of type of ethical categories and to identify moral attitudes towards different societal activities between Shari’ah compliant company Bank Islam Malaysia Berhad (BIMB) and Non-Shari’ah compliant company Malayan Banking Berhad (Maybank). The data is analyzed using content analysis. The findings revealed that there are different rhetoric applied in both types of companies such as Agency (profit), Benefit (collective welfare), Compliance (law and contracts), Duty and Ethos (virtue). In term of moral attitudes, both types of companies disclosed relatively similar behaviour and commitment towards CSR. This research is the first of its kind to be conducted in Malaysia by using this new approach and will contribute new insights to existing CSR literatures in Malaysia.