Banks In Malaysia Research Articles

Intellectual capital and financial performance, measured by camels perspective

This study empirically examines the impact of intellectual capital on banks financial performance in 57 public listed banks from Indonesia, Malaysia, and Thailand over the period of 2019 to 2020. Intellectual capital is measured by Pulic’s Value Added Intellectual Coefficient (VAICTM), while banking performance is measured according to CAMELS analysis method. Through the method of partial least squares analysis to find the path coefficients value of each variable, the results obtained show that there is a significant positive impact of VAICTM on management quality (NPM) and earnings (ROA) in Indonesian, Malaysian, and Thai Banks, and significant negative impact of VAICTM on asset management (NPL) of Indonesian, Malaysian, and Thai Banks. On the other side, VAICTM is considered to have an insignificant impact on the capital adequacy (CAR), liquidity (LDR), and sensitivity to market risk (IER) of the in Indonesian, Malaysian, and Thai Banks in 2019-2020.

Hidden jewels of Malaysia: two new genera and species of remarkable clearwing moths (Lepidoptera: Sesiidae: Osminiini)

A stunning scarlet-coloured clearwing moth was found mud-puddling on a rainforest river bank in Malaysia and is described herein as a new genus and species, Scarlata nirvana gen. et sp. Nov.. This sesiid seems to be a rare case of a mimic of an assassin bug (Hemiptera: Reduviidae) in a family otherwise known for hymenopteran mimicry. A high-quality video of the moth’s behaviour in its habitat is provided. Studies of the collections of the Natural History Museum in London revealed another member of the new genus, S. guichardii sp. nov. A third species, S. ignisquamulata Kallies, 2018 comb. nov. is transferred to Scarlata gen. nov. from the genus Aschistophleps Hampson, 1892. The second new lineage from Malaysia described here, Malayomelittia gen. nov., includes two species, Malayomelittia pahangensis Skowron, 2015 comb. nov. and M. ruficrista Rothschild, 1912 comb. nov. Additionally, Heterosphecia bantanakai Arita & Gorbunov, 2000 is placed as a junior synonym of H. hyaloptera Hampson, 1919 syn. nov. Morphological descriptions, remarks on behaviour, conditions of occurrence and a discussion about potential mimicry models are included. All new taxa are figured, including images of male genitalia. https://urn:lsid:zoobank.org:pub:32AF6419-F859-4931-BCA7-848B636CC2EE New genus Scarlata: https://urn:lsid:zoobank.org:act:B8DC2871-DF12-49A9-A7A7-D67E60776E91 New genus Malayomelittia: https://urn:lsid:zoobank.org:act:07B2830B-7E00-4B9D-9D5A-82A7538427F9

Ownership in Islamic banks: how home country development influences the performance of foreign Islamic banks

PurposeThis study aims to assess the performance of domestic and foreign Islamic banks as well as the influence of foreign banks’ home country development influence on the performance of foreign banks.Design/methodology/approachThis study uses data of 17 domestic Islamic banks and 11 foreign Islamic banks from Bahrain, Malaysia and Pakistan from 2010 to 2018. Pooled ordinary least square is used to investigate the relationship between home country development and performance of foreign Islamic banks.FindingsResults from this paper suggest domestic Islamic banks in Malaysia have higher performance than their foreign counterparts while foreign Islamic banks from Pakistan have higher performance than their domestic counterparts. However, as a whole, the performance of domestic and foreign Islamic banks is not significantly different from one another. Development of foreign banks’ home country measured by gross national income per capita and gross domestic product per capita show significant positive influence on the performance of foreign Islamic banks.Originality/valueHigher level of development of the home country of foreign banks appears to influence the performance of foreign banks in the host country.

Money creation and commercial banks’ money lending activity through the accounting treatment: stakeholders’ perceptions in Malaysia

PurposeThe purpose of this study is to explore stakeholders’ perceptions on money creation and the impact of the accounting treatment for commercial banks’ money lending activity in Malaysia.Design/methodology/approachA phenomenological approach was used to examine the stakeholders’ perceptions through experience-sharing. A semi-structured interview approach was used to collect the data. Ten individuals from different stakeholder groups have been interviewed with their prior consent. For the data analysis, the current study adopted the inductive thematic approach.FindingsPerceptions on money creation are influenced by the informants’ understanding and awareness of the research issue. Informants have agreed on the accounting treatment (debit loan and credit deposits) but explained the impact of this accounting treatment differently. The accounting treatment creates an opportunity for the commercial banks to create money as they want, and hence, the excess created money can create inflation and threat for the potential financial crisis. On the contrary, it is argued that money creation results from the systematic approach of the fractional reserve banking (FRB) in Malaysia. In addition, this money creation is not a threat to the economy as long as there is a strong controlling role of Bank Negara Malaysia (BNM).Research limitations/implicationsStakeholders’ perception indicates that awareness of the research issue can be a cause of crucial consequence for money lending activity. Moreover, this study may stimulate the chief regulatory body such as BNM, the central bank of Malaysia, to be more cautious in controlling the commercial banks’ money lending activity to prevent the potential future crisis. Furthermore, findings may help to explain the conflicting concept between the textbook explanation for FRB and current commercial banks’ money lending practice through the accounting treatment.Originality/valueMonitoring and controlling of money creation and commercial banks’ money lending activity by BNM can be benefited from the stakeholders’ perceptions on this research issue. Because this is the first time study of the stakeholders’ perceptions on money creation and commercial banks’ money lending activity in Malaysia and hence, findings of this study may be worked as the input in the process of monitoring and controlling the money creation activity in Malaysia.

Housing loan default in Malaysia: an analytical insight and policy implications

PurposeThe purpose of this paper is to examine the drivers of default in the Malaysian housing market in the light of various policy interventions by the country’s central bank, and the government’s expressed concern to ensure balanced growth in the market. This paper assesses the importance of considering the endogeneity of loan-to-value (LTV) in predicting housing loan default and its implications.Design/methodology/approachIn this paper, the author addresses the endogeneity problem in the LTV variable using two instrumental variables (IV) in this probit regression: national residential property gains tax and the statutory reserve ratio of Bank Negara Malaysia. This study uses the instrumental variable probit model to consider endogeneity bias. This study assumes a latent (unobservable) variable (Y*), representing a borrower’s tendency to default, which is associated linearly with the borrower’s and loan characteristics and other variables (Xi). This study uses individual borrower-level information of 43,156 housing loan borrowers from the files of a well-established housing bank in Malaysia.FindingsThis study’s results confirm that endogeneity causes a substantial difference in the magnitude of the estimated effects of LTV on the default tendency. At the lower values of LTV, the probability of default is over-estimated, and at the higher values, the default probability is substantially underestimated. Endogeneity bias also affects the estimated coefficients of loan and borrower characteristics. The authors find that the interest rate is less relevant in predicting loan default. Other loan characteristics, such as loan age, tenure, payment amount and the built-up area, are relevant. This study’s result confirms that the borrower’s location matters, and an increase in state gross domestic product per capita and an increase in the supply of residential units reduce default probability.Research limitations/implicationsThe present study did not explore the applicability of the “equity theory of default” in the Malaysian housing market. This study did not assess “strategic default” issues and the effect of borrowers’ characteristics, personality traits and self-control of Malaysian housing loan borrowers in the mortgage decision-making process. The evolving dynamics of the Malaysian housing market microstructure in property valuation remained unexplored in the present study.Practical implicationsThe findings have crucial relevance in the decision-making process of commercial banks, the central bank and the government to frame policies to foster balanced growth and development in the housing market. The authors argue that striking a subtle balance between the concerns of financial stability and productive risk-taking by commercial banks in Malaysia remains a continuing challenge for the country’s central bank. The authors also argue that designing suitable taxation policies by the government can deliver its cherished goal of balanced development in the housing market.Originality/valueEmpirical research on the Malaysian housing market based on micro-level data is scarce due to a paucity of relevant data. This study is based on the individual borrower-level information of 43,156 housing loan borrowers from the files of a well-established housing bank in Malaysia. In this analysis, the authors find clear evidence of endogeneity in LTV and argue that any attempts to decipher the default drivers of housing loans without addressing the issue of endogeneity may lead to faulty interpretation. Therefore, this study is unique in recognizing endogeneity and has gone deeper in identifying the default drivers in the Malaysian housing market not addressed by earlier papers.

The Impact of COVID -19 to the Malaysian Social-Economic and Islamic Banks, and the Role of Maqasid Shariah

The COVID-19 outbreak is a global health issue that has hit countries around the globe. This pandemic has further been detrimental to the world’s socio-economies. The many restrictions implemented to curb the spread of the virus, such as the Movement Control Order (MCO), have resulted in socio-economic constraints that harm the commercial activities of individual businesses as well as corporate organisations. The MCO has also been alleged to negatively affect people’s mental health due to its impact on decreasing household income and exacerbating poverty. The banking sector is not immune to the pandemic’s effect, as reflected in its financial performance. As a result, the Malaysian government responded by announcing stimulus packages for businesses and retail sectors. At the same time, the financial institution through the Bank Negara Malaysia (BNM) remains committed to helping households and businesses. Thus, this paper aims to discuss the impact of COVID-19 on the performance of Islamic banking institutions from a socio-economic lens by comparing the first and second-quarter profits of the years 2019 and 2020. This study also looks into the roles of Maqasid Shariah and its application during the pandemic. Content analysis was applied as a tool for data collection from related websites, news and quarterly financial reports to analyse the performance of the banks. Analysis of the quarterly financial reports found that bank profit demonstrated a steep decline during the second quarter of the said period, constant with the middle of the MCO time frame. The study also found that the analysed banks reported non-financial performance reflected by Maqasid Shariah measures. This finding indicates that Islamic banks are responding to the need of society to ease the burden of adverse financial impacts on customers. Therefore, this research implicates that various parties have played their role and continue to do so in mitigating the consequences of COVID-19. This role emphasises the value of achieving Maqasid Shariah to maintain societal wellbeing and in helping the country implement sustainable growth plans. Accordingly, this study can function as a guide and serve as a lesson to all parties in reducing the effect of the current pandemic and any other shocks, including natural disasters and the financial and economic outcomes of the recession.

Determinant of Compliance Perceptions among Bank Officers towards Anti-Money Laundering

The purpose of this study is to investigate the perceptions of determinants of anti-money laundering compliance among banking officers in mitigating money laundering. There are three independent variables that are employed in this study to understand and analyze the level of perceived compliance among the banking compliance officers, which are the regulatory comprehensiveness, training, and awareness. The data were collected through the distribution of questionnaires to 56 banks in Malaysia. The findings of this study show that there is a positive relationship between regulatory comprehensiveness, training, and awareness on the perceived level of compliance. This study recommends that efforts should be made by the banking institution to strengthen the anti-money laundering regulation and policy to improve the efficiency of financial institutions in Malaysia. In addition, the compliance officer's competency should be enhanced to ensure better compliance quality.

Comparison Of Sharia Banking Performance Implementation Based On Maqashid Shariah Index In Sharia Banks In Indonesia And Malaysia

This study aims to analyze the performance of Islamic banking in Indonesia and Malaysia. At present, the measurement of the performance of the Islamic banking industry uses only the measurement of financial ratios (which are oriented towards shareholders). This measurement is not enough. Islamic banking needs a new paradigm in terms of measuring its performance of the which is not only limited to financial ratios. This study Applies approach the maqashid shariah index as a measurement of sharia banking performance. This type of research used in this study is comparative research. The object of this research is the Islamic banking industry, there are eight Islamic banks in Indonesia and nine Islamic banks in Malaysia that meet the criteria. The type of the data used is secondary the data in the form of financial reports / annual reports Obtained from the official website of each bank. By using the different test analysis method, the F count for the MSI variables with variances assumed aqual (assumed that both variants are equal) is 2002 with a probability of 0117. Because the probability of the data> 0.05, it can be concluded that there is no significant difference in the variance in the performance comparison of data based on the MSI of Islamic Banks of Indonesia and Islamic Banks of Malaysia.

Some thoughts on resetting the roles and functions of Sharīʿah committees of Islamic banks in Malaysia

PurposeThe purpose of this study is to understand and evaluate the roles and functions of the Sharīʿah committee (SC) of Islamic banks (IBs) in Malaysia and to recommend a resetting of the scope of responsibilities to enable the SC to effectively respond to current market needs.Design/methodology/approachA Likert-type survey questionnaire was developed and distributed to all available SC members through e-mails and online surveys as well as self-administered questionnaires. At the end of the survey, 87 useable questionnaires were collected from 161 SC members, representing a 54% response rate.FindingsThis study finds that most SC members have the necessary Sharīʿah qualification, and they are mostly academics with doctoral degrees. However, there is a noticeable lack of diversity in the composition of experts in the committees. Respondents indicate that their main functions are to ensure Sharīʿah compliance of bank operations and product offerings. This is of course consistent with their stated functions as outlined in the Bank Negara Malaysia's Sharīʿah Governance Policy Document (BNM, 2019). The study finds that SCs are not involved in product development, nor responsible for financial performance. Respondents indicate three ways to enhance the role of SCs: improving banking knowledge of the members, more engagement with the board of directors (BoDs) and broadening the functions of SCs.Practical implicationsThis study highlights two policy implications. First, there is a strategic need for IBs to consider having a diversity of expertise in the SCs while maintaining the Sharīʿah experts as core members. Second, this study recommends a reset of the scope of duties of the SC to include three new areas: risk management, product development and financial performance.Originality/valueThis study evaluates the current functions of the SC of IBs in Malaysia and provides suggestions for improvement in the composition of the committee and in the scope of duties of SCs based on contemporary needs.

Waqf Bank Discussion Series: An Operational Structure Development for Economic Growth in Malaysia

Waqf is an Islamic financial mechanism that can improve the quality of the Islamic financial system. The Islamic banking system's operation using waqf practices such as creating waqf banks (WB) can contribute to the development of the Islamic financial and economic system. However, until now, Malaysia still does not have a WB. In line with this, the main objective of this study is to propose a model that focuses on how to develop the new WB Operational Structural model, which has to be in line with shariah law. This study is a qualitative study using an exploratory design. This study involved the collection of primary and secondary data. Primary data were obtained through face-to-face interviews using semi-structured questions on waqf institutions executives, Islamic bank managers, and Muslim scholars to indicate WB operational structure development. Secondary data involves document sources such as books, magazines, journals, and others. The data were then analyzed by qualitative content analysis. The study results found that the bank endowment structure model should consist of the consumer banking department (CnBD), corporate banking department (CBD), and the bancassurance department. It is hoped that this bank wakaf model can be used as a guide for banks and national leaders in their efforts to develop a wakaf bank in Malaysia.

Moderating role of Shariah committee quality on relationship between board of directors effectiveness and the performance of Malaysian Takaful

PurposeThe purpose of this study is to examine the effect of Board of Directors Effectiveness (BODE) on the performance of Malaysian Takaful companies licensed by the Central Bank of Malaysia. In addition, the study investigates the moderating effect of Shariah Committee Quality (SCQ) on the relationship between BODE and companies’ performance.Design/methodology/approachThis study uses a sample of 11 Malaysian Takaful companies during the period of 2010-2017. While BDE and SCQ are measured using indices, performance is proxied using ROA and ROE. A panel fixed effect regression analysis is used to test the impact of the BDE on the financial performance of Malaysian Takaful companies and the moderator role of SCQ.FindingsThe main finding of this study shows a positive association between BDE and performance. More specifically, boards with a high presence of independent, Muslim and female directors positively contribute to the performance of Malaysian Takaful companies. Another interesting finding is related to the positive moderating effect of SCQ on the relationship between BDE and performance. This result indicates that a high level of SCQ combined with a high level of board effectiveness improve performance.Practical implicationsThe finding is of great importance to stakeholders and policymakers to improve their board effectiveness and the quality of the Shariah committee to reduce agency costs and to improve the performance of Malaysian Takaful companies.Originality/valueThis study adds to the prior literature by investigating for the first time the relationship between BDE and performance and the interaction effect of SCQ on the performance of Malaysian Takaful companies.

The moderating role of gender on behavioural intention to adopt mobile banking: a Henseler's PLS-MGA and permutation approach

This study aims to evaluate the predictors that affect the behavioural intention (BI) to adopt mobile banking in Malaysia which is currently an understudied topic. Self-efficacy (SE) perceived risk (PR) government support (GS) and subjective norms (SN) was extended with the technology acceptance model (TAM) to determine their influences on consumers' BI with gender acting as a moderator. 450 self-administered survey questionnaires were distributed to mobile respondents in Malaysia with 408 valid responses being gathered. Data were subsequently analysed using PLS-SEM. The results showed that TAM, SN and SE significantly influenced consumers' BI. Surprisingly GS and PR were insignificant predictors. Gender was found to be a significant moderator for perceived ease of use (PEOU) SE and PR with BI through Henseler's PLS-MGA and permutation approach. Importance-performance matrix analysis also revealed that SE has high importance but low performance and therefore should be given priority. This study has valuable contributions to academicians and practitioners.

Credit Risk Differential between Islamic and Conventional Banks in Malaysia

The Journal of Southeast Asian Economies (JSEAE) is a peer-reviewed journal focusing on economic issues pertaining to countries in the region – defined as the ten members of the Association of Southeast Asian Nations (ASEAN) and East Timor. JSEAE welcomes articles using orthodox economic approaches as well as those of a more heterodox nature. Oriented at both researchers and policy-makers, the journal seeks to reconcile the ideals of relevance, methodological rigour, and accessibility. Published by the ISEAS – Yusof Ishak Institute tri-annually, JSEAE includes: articles based on original research; research notes; review articles; and book reviews. Once a year, the Journal publishes a Special Issue devoted entirely to a topic of import for the region. Up until April 2013, JSEAE was published as the ASEAN Economic Bulletin (AEB). However, following new developments in the regional and global context, as well as the establishment of new multi-lateral trading agreements including countries in the region, the Directorship of ISEAS and AEB’s Editorial Board decided to change the journal’s name. While its name has changed, JSEAE remains committed to being the premier economic journal for Southeast Asian academicians and policy-makers, as well as anyone with an interest in the region. All research articles in the journal have undergone rigorous peer-review. The process consists of initial screening by the Co-Editors and Associate Editor, followed by double-blind refereeing; two reviewers for articles and one reviewer for research notes.

Exploring Digitalization of Malaysian Banking and Fintech Companies’ Services from the Customer’s Perspective

This paper aims to explore the process of digitalization of the financial services provided by Malaysian banks and FinTech companies and to address the issues and challenges they face. Both secondary and primary sources are used in this study, where the latter represented by questionnaires and in-depth interviews with the banking and FinTech practitioners. The qualitative aspects of the Analytical Network Process method are used to identify and analyze economic, regulatory, and operational issues faced by banks and FinTech institutions in the process of digitalizing financial services. The findings provide useful insights on whether the policies set by Bank Negara of Malaysia either accelerate or hinder the growth of Malaysia’s digital finance sector. The challenges faced by banks and FinTech companies, while digitalizing their financial services, are quite similar. They include the concerns of cyber security, lack of customer readiness in utilizing the financial services, particularly in rural areas, and the need for financial authorities to maintain stronger consumer and investor protection due to high pace of evolution of financial technology. It was also noted that customers have evolving expectations towards digital financial services, because they want seamless digital banking solutions to meet their daily needs. Previous studies had their focus on the benefits and impact of digital finance on financial inclusion as well as financial innovation. This research takes a different approach as it reflects on the impact of digitalization of financial services provided by banks and FinTechs through the prism of customer perspective.

BANK SPECIFIC AND MACROECONOMIC FACTORS INFLUENCING ISLAMIC BANKS DEPOSITS

Deposits are like the bloodline for banks as they determine banks' lending capacity and a country's economic savings. However, the existence of a dual banking system poses a challenge to Malaysian Islamic banks competing for deposits. Despite this problem, few investigations were done to comprehensively identify the factors that could help banks attract deposits, particularly for Islamic banks. The purpose of this paper is to fill this gap on deposits of 16 Islamic banks in Malaysia. Secondary data from the bank's annual reports and the Department of Statistics of Malaysia from 2015 to 2019 were analyzed, comprising Islamic Bank Deposits and seven predictors in an empirical model using STATA. The result shows a strong model fit with 92% R squared value that Return on Assets, bank concentration, and Business Enterprise Depositor affect Islamic Bank Deposits positively and significantly while Capital Adequacy Ratio showed negative and significant influence on the deposits. These factors are strongly effective to deposits, significant at 1% level. In contrast, Financing Deposit Ratio and Gross Domestic Product do not significantly influence Islamic deposits. Contrary to economic theory, this study found that an increase in inflation encourages customers to increase their saving deposits in Malaysian Islamic banks. The findings from this study are unique to Malaysian Islamic banks. They indicate important policy implications for Islamic banks practitioners, namely, to increase their focus on business enterprise customers, improve bank's market share and profitability in order to increase deposits while taking advantage of high inflationary period to attract more depositors.

SHARIA COMPLIANCE RISK IN ISLAMIC BANK: DOES INDONESIA NEED TO ADOPT NEW SHARIA RISK RATING APPROACH ?

The purpose of this study is to find the most relevant practice of supervision to manage Sharia Compliance Risk in Indonesian Islamic Bank based on the existing literature. The standard doctrinal approach is used to analyse, examine and evaluate the practice of Islamic banking supervision in Indonesia and Islamic banking in Malaysia for comparative purposes. The results revealed that the prior study on Sharia risk rating is applicable to manage Sharia Compliance Risk in Islamic Banks and their factors meet the Basel, AAOOIFI, and IFSB standards. However, there is no assessment made on evaluating the quality of supervision by Sharia Supervisory Board (SSB) members. Thus the study suggested the inclusion of additional factors on the performance of SSB. For Islamic Banking in Indonesia, this sharia risk rating approach can be combined with applicable internal and external risk rating techniques, to provide the promising quality of service and ensure that the offering of various products and services complies with Sharia rules and principles

Adoption of artificial intelligence in banking services: an empirical analysis

PurposeThis study aims to understand the importance and challenges of adopting artificial intelligence (AI) in the banking industry in Malaysia and examine the factors that are important in investigating consumers' intention to adopt AI in banking services.Design/methodology/approachThe qualitative research was carried out using in-depth interviews from officials in the baking industry to understand the importance and challenges of adopting AI in the banking industry. In the quantitative study, a total of 302 completed questionnaires were received from Malaysian banking customers. The data were analysed using the SmartPLS 3.0 software to identify the important predictors of their intention to adopt AI.FindingsThe qualitative results reveal that AI is an essential tool for fraud detection and risk prevention. The absence of regulatory requirements, data privacy and security, and lack of relevant skills and IT infrastructure are significant challenges of AI adoption. The quantitative results indicate that attitude towards AI, perceived usefulness, perceived risk, perceived trust, and subjective norms significantly influence intention to adopt AI in banking services while perceived ease of use and awareness do not. The results also show that attitude towards AI significantly mediates the relationship between perceived usefulness and intention to adopt AI in banking services.Practical implicationsFinancial technology (FinTech) is regarded as a critical determinant of strategic planning in the banking industry. While AI provides various disruptive opportunities in the FinTech space in terms of data collection, analysis, safeguarding and streamlining processes, it also poses a sea of threats to incumbent banks. This study provides vital insights for the policymakers of the banking industry to address the challenges of adopting AI in banking. It also provides the important predictors of the bank customers' intention to adopt AI in banking services. Policymakers can devise their strategies to enhance AI adoption considering the facts.Originality/valueThis study is amongst the pioneer in exploring the importance and potential challenges in implementing AI technology in banking services and identifying the essential factors influencing the intention to adopt AI in Malaysia's banking services.

THE IMPACT OF MCO ON THE STOCK MARKET AND MORATORIUM ON BANKING SECTOR’S PERFORMANCE IN MALAYSIA: THE CASE OF COVID-19

This study examines the influence of COVID-19 on the KLCI and also the stock price of banks in Malaysia. We use the event study methodology to examine the impact of COVID-19 in the pre-and post-10 days of the event dates. Data on stock prices of are obtained from Bursa Malaysia. The findings show that the cumulative abnormal return (CAR) of the overall stock market decreased significantly after the announcement of the first Movement Control Order (MCO) in the country. This indicates that the economic and financial instability caused by COVID-19 has reduced investor confidence. The study also shows that blanket loan moratorium has resulted in a decrease of CAR for three major local banks. The MCO which was enforced to reduce the number of widespread cases was followed by the implementation of bank moratorium to assist the people due to their income reduction. Hence, our study empirically shows that banks were negatively affected by the implementation of moratorium.

Exploring the nexus between Credit risk and Off-balance sheet activities of commercial banks: A case of an emerging Asian economy

This study's primary purpose is to examine the relationship between credit risk and off-balance-sheet activities at conventional and Islamic commercial banks in Malaysia. In order to investigate and achieve the research's objectives between 2010 and 2017, a diverse group of 25 banks was chosen. The category of commercial banks includes both conventional and Islamic banking systems. Fixed effect and GMM panel estimates, followed by a series of diagnostic tests, seemed to be the most appropriate methodologies for this inquiry. According to the findings of the Husman test, endogeneity was shown to exist. In this instance, Arellano-Bond tests for zero autocorrelation may be obtained from the work's GMM analysis. In addition to establishing that the concept of market portfolio theory is accurate, the study demonstrated that off-balance-sheet performance may be improved by increasing fee-based income and, ultimately, performance, which would reduce credit risk. In addition, the results reveal a positive association between credit risk and credit risk, lending validity to the claim that financial intermediaries are required. The results of the study add credibility to market portfolio theory and financial intermediation theory. This is one of the first studies to examine credit risk and off-balance-sheet issues in Malaysia; it is also one of the earliest studies of its type. The research will aid legislators, bankers, and academics by enhancing their knowledge of these issues. The study evaluated the issue in three separate countries, taking bank-specific characteristics into consideration. Nevertheless, further study is necessary, especially with a larger sample size and under closer supervision
 

Implementasi Perbankan Syariah Di Malaysia Dan Indonesia

This study aims to analyze the implementation of Islamic banking in Malaysia and Indonesia. This research uses exploratory study method, descriptive analysis in analyzing secondary data related to these problems. The results show that the difference in product diversity and Islamic bank contracts in the two countries is due to several factors such as the economic system adopted by a country, the school of thought or school of thought used by the majority of people in each country, the position of Islamic banks in the law and the approach to law. selected product development.