RISK TAKING BEHAVIOR AND MACROECONOMIC INDICATORS OF ISLAMIC BANKS PROFITABILITY IN MALAYSIA

Purpose: The purpose of the study is to examine the profitability indicators of full-fledged Malaysia Islamic explored in 1994-2013. Design/methodology/approach: The return on assets (ROA) is used as profitability measures to determine the effect of Risk Taking Behavior, transmission of monetary policy and macroeconomic conditions indicators on profitability. The descriptive, correlation and panel regression analysis results are derived with the help of Limdep 9.0 software. Findings: The retained profit, return on equity, money supply and economic growth establish positive and significant relation with profitability models. Otherwise, the highest credit risk taking and loan loss provision lead to lower profitability measured by return on assets (ROA). Originality/value: The main objective of the study is providing empirical evidence on indicators of profitability in case of seventeen full-fledged Malaysia Islamic Bank to fill a demanding gap in the literature.