Impact of Bank-Specific and Macroeconomic Variables on Return : A Study on Islamic Banks in Bangladesh

Abstract

Islamic banking has now become a proven model of banking business worldwide as it offers stable return from both the perspective of assets and capital of a commercial bank. Within a very short span of time, Islamic banks in Bangladesh depicted a commendable growth. This innovative banking mechanism is widely accepted from the bankers as well as customers' standpoint. This study analyzes the impact of some selected bank-specific and macroeconomic variables on the profitability of all the seven Islamic banks in Bangladesh with panel data from 2003 to 2014. The study findings conclude that some of the bank-specific and macroeconomic variables have a significant influence on the profitability of Islamic banks.