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Purpose – This study investigates the management of asset structures in Malaysia’s commercial banking sector.

Methodology/approach – The study uses unbalanced panel data from 17 Islamic banks in Malaysia, covering the period 1997 to 2012. All significant data have been taken into account in analysing whether there is a relationship between asset structure management and certain factors involving bank-specific financial conditions and macroeconomic features. These include financing, deposits, profits, money supply, gross domestic product (GDP) and composite indices.

Findings – The results reveal that asset management structure is significant for total financing, total deposits, money supply, GDP and composite indices. In conclusion, the management of asset structures acts to efficiently prevent any unexpected crises that may affect banking operations.

Originality/value – The structure of asset management in Islamic banking is influenced by internal and external factors which have the most impact on asset management by Islamic banks. Islamic banking also provides more financing to reduce their risk and at the same time they attempt to increase deposits and investment in due to interest rate volatility in conventional banking.