DETERMINANTS OF BANKS’ PROFITABILITY: A COMPARATIVE ANALYSIS BETWEEN MALAYSIA AND SOUTH AFRICA

Özet

Based on a comparative analysis, a study was conducted to evaluate the effects of non-performing loans, bank size, capital adequacy ratio, and GDP on the profitability of banks in emerging economies i.e. South Africa and Malaysia. As inputs for data analysis, the study utilizes secondary data from the Thomson Reuters database, the world bank database, and the selected bank’s financial statements. Besides, by employing a multiple regression analysis on the data available between the periods of 2008-2020, bank size and non-performing loans were found to exert positive and significant effects on South African Bank's ROA metrics. As with Malaysia, an inverse relationship was found between banks’ ROA and their non-performing loans. The study draws practical and managerial implications relevant to the operational efficiency of banks in both countries.