Abstract
This paper investigated the parameters that influence Islamic Banks' financial performance in Malaysia, Indonesia, Thailand, Brunei, and Singapore. The past decades have witnessed the positive expansion of Islamic banking in Southeast Asia but a discernible drop in their profitability and assets growth may denote poor performance. This requires investigation. This quantitative study examined the factors that may influence Islamic banks' financial performance, and found Assets Quality, Liquidity, Debt Funding and Equity funding as the significant parameters in determining Islamic banks' financial performance among the countries examined. Also, GDP Growth Rate and interest rate were the only external parameters with positive influence on Islamic banks' financial performance. Notably, Inflation and Tax rate were not significant in determining Islamic Banks' financial performance. Accordingly, management should strengthen the practices and implementations of the profit loss sharing (PLS) based instruments among the examined Islamic banks. Hence, disparities could be decreased while the economic opportunities could be improved, particularly those that could greatly contribute to the capital build-up and the creation of economic growth.