Financial performance analysis of commercial banks in Malaysia using dupont analysis / Wan Shahraifana Saharan

• Main Author: Saharan, Wan Shahraifana
• Format: Student Project
• Language: English
• Published: 2016
• Subjects: Special classes of banks and financial institutions; Financial management. Business finance. Corporation finance; Financial leverage
• Online Access: https://ir.uitm.edu.my/id/eprint/78159/1/78159.pdf; https://ir.uitm.edu.my/id/eprint/78159/
• Institution: Universiti Teknologi Mara

Briefly, the Malaysian economy is expected to be resilient and still show significant growth while the global economy gives cause for concern on several fronts. The objective of the paper is to demonstrate that in most cases the most profitable companies are not the most active for investors - through Dupont Analysis method. In order to do this, we take into account the local commercial banks in Malaysia quarterly from 2011 till 2015. Decomposition of Return on Equity (ROE), Total Assets Turnover (TATO) and Equity Multiplier (EM) provides an analytical framework appropriate for observing factors that make and influence financial profitability, represented by the value of ROE. Hence, this study is to investigate the profitability performance of commercial banks in Malaysia whether the banks are generating a good return on the investment of the shareholders. For the empirical work, correlation analysis, multiple regression and recent econometric analysis were conducted to determine the relationships between the variables. The result gained from the study shows there exist a significant relationships between ROE and independent variables.