Determinants of Profitability – A Comparative Analysis of Islamic Banks and Conventional Banks in ASEAN Countries
8 Pages Posted: 16 Apr 2013
Date Written: April 16, 2013
The profit and loss sharing system allows bank to share risk with client in Islamic banks. Moreover Islamic banks are required to operate as per Islamic Rules and principles. Unlike Islamic banks, conventional banks operate based on interest. The income of conventional banks is the difference between interest paid to depositors and interest paid by borrowers. This is the common banking system around the world. This study will analyze determinants of profitability in Islamic banks will be compared to conventional banks in ASEAN countries. This study will aim to present an empirical investigation on ASEAN Islamic and conventional banks. The study of profitability will look at different banking characteristics such as Short term fund management, Source management, capitalization, liquidity, size and Macro- economic conditions.
Keywords: Islamic Banks, ASEAN Countries, Profitability
JEL Classification: G21
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