Do financing models in Islamic bank affect profitability? Evidence from Indonesia and Malaysia

IntroductionPrevious literature discussed financing's impact on performance without separating the financing model. Additionally, previous research has used in form of Loans to Total Assets (LTA); a proxy assess bank liquidity.ObjectivesThis study aims analyze influence models Islamic Banks’ Indonesia and Malaysia. MethodThe Malaysia banks for its pioneering efforts establishing banking Southeast Asia. The collects data from five Indonesian four Malaysian banks, with an observation period 2011–2020. analysis this was Generalized Method Moment (GMM).ResultsIn Indonesia, debt positive significant Return (ROA), while equity negative ROA; significantly affects Equity (ROE), does not have ROE. In Malaysia, ROA, affect ROE, ImplicationsThe results highlight importance considering specific characteristics each country's industry when formulating strategies.Originality/NoveltyThis highlights unique aspect that contribute profitability