| By: |
Fairuz, Sharifah;
Masih, Mansur |
| Abstract: |
Repeated financial crises helped the growth of Islamic banks as an alternative
asset for investment. Similar to conventional banks, Islamic banks also depend
on depositors’ money as their source of funds. The profit rate of Islamic
banks is expected to influence the amount of funds deposited for investment.
This paper wants to investigate what drives the profit rates of Islamic banks.
The standard time series techniques are used for the analysis. Malaysia is
used as a case study. The findings tend to indicate that the profit rates are
driven by the investment deposits of Islamic banks followed by the deposits of
the conventional banks and their interest rates. The outcome of the results
would be particularly of great interest to the regulators and Islamic bank
CEOs to make decisions on whether to still depend on conventional rates and
deposits in order to survive. |
| Keywords: |
Islamic bank investment deposits, conventional bank deposits, interest rates, profit rates, Malaysia |
| JEL: |
C22 C58 E44 G21 |
| Date: |
2018–11–30 |
| URL: |
http://d.repec.org/n?u=RePEc:pra:mprapa:102599&r=all |