The Profitability of Islamic and Conventional Bank: Case Study in Malaysia

Abstract

This study aims to analyze the profitability in Islamic Banks and Conventional Banks in Malaysia. The study uses the period of the year 2006 to until the year 2011. In methodology, this research using T-Test Model, Regression and Correlation. Meanwhile, data are collected from the Bursa Malaysia and bank website in Malaysia. This study finds that Islamic Banks are more profitable than Conventional Banks whereas Total Loan to Total Asset for Islamic bank is higher than Conventional bank. Based on Regression test, for Conventional Banks, ROE is an influence profitability of Conventional Bank.and for Islamic Banks, ROA and ROE are significant factor that influence profitability. Based on Correlation test, ROE is an influence profitability of Conventional Bank and for Islamic Banks, ROA and ROE are significant relationship with independent variable which is Total Equity to Total Asset.