Download or read book Relationship Between Islamic Banking Profitability and Determinants of Efficiency written by Mohamad Akbar Noor and published by . This book was released on 2012 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: The paper investigates the efficiency of the 78 Islamic banks in 25 countries for the period 1992-2009. The efficiency estimates of individual banks are evaluated using the non-parametric Data Envelopment Analysis (DEA) method. The empirical findings seem to suggest that the Islamic banks have exhibited high Pure Technical Efficiency (PTE). A multivariate analysis based on the Tobit model reinforces these findings and significantly associated with operating expenses against asset, size, equity, NPL, Asia Financial Crisis and national income level (GDP). The Fixed Effect Model (FEM) used to analyze profitability proposed that profit efficiency is positive and statistically significant with operating expenses against asset, equity, high income countries and non- performing loans against total loans. Interestingly, the empirical results show that more profitable banks are those that have higher operating expenses against asset, more equity against asset and concentrated at high income countries, demonstrating a close relationship between monetary factors in determining Islamic banks profitability.

Download or read book The Determinants Efficiency and Profitability of Islamic Banks written by Mohamad Akbar Noor Mohamad Noor and published by LAP Lambert Academic Publishing. This book was released on 2012-02 with total page 84 pages. Available in PDF, EPUB and Kindle. Book excerpt: The book studies the efficiency of the Islamic banking sectors in 25 countries during the period of 1992-2009 consists of 78 Islamic banks involved. The efficiency estimates of individual banks are evaluated using the non-parametric Data Envelopment Analysis (DEA) method. The empirical findings seem to suggest that the World Islamic banks have exhibited high pure technical efficiency. A multivariate analysis based on the Tobit model reinforces these findings and significantly associated with operating expenses against asset, size, equity, NPL, Asia Financial Crisis and national income level (GDP). We also find positive correlation between bank profitability and technical efficiency levels, indicating that the more efficient banks tend to be more profitable with strong result at Asian Islamic banks. The profitability analysis by Fixed Effect Model (FEM) proposed that profit efficiency is positively and significantly associated with operating expenses against asset, equity, high income countries and non performing loans against total loans specifically for model 8 & 9 that positively at 1% level.

Download or read book Economic Efficiency and Profitability of Islamic Bank written by Mohamad Akbar Noor Mohamad Noor and published by LAP Lambert Academic Publishing. This book was released on 2012 with total page 264 pages. Available in PDF, EPUB and Kindle. Book excerpt: The study is among the first few studies on Islamic banking that will provide comprehensive cross countries between Islamic banks in the world using more than one analytical approach. Hence, the study also provides contribution in term of rigorousness of the methodology used as compared to previous studies on Islamic banks. This study will contribute findings for 3 different methods used from efficiency, determinants of the efficiency, the profitability and the relationship between efficiency determinants and profitability. Hence, it provides a more comprehensive analysis whereas most studies in the past applied specific model such as Data Envelopment Analysis (DEA) or Tobit or Fixed Effect Model (FEM) on an individual basis instead of employing the three methods in one study. The findings from this comparative study will add an interesting dimension to the existing literature and body of knowledge in relevant manners. This study is novel in presenting new finding on the impact to the Islamic banks on several latest issues such as Financial Crisis (AFC), 2008 Global Financial Crisis (GFC), region in MENA and ASIA, and GNI country income based on 2003 World Bank Atlas method.

Download or read book The Determinants of Efficiency Profitability and Stability in the Banking Sector written by Majed Alharthi and published by . This book was released on 2016 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Profitability and Efficiency Determinants written by Abdelhakim Embaya and published by . This book was released on 2012 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Islamic Accounting And Finance A Handbook written by Khaled Hussainey and published by World Scientific. This book was released on 2023-03-23 with total page 882 pages. Available in PDF, EPUB and Kindle. Book excerpt: Islamic finance is one of the fastest-growing sectors in international banking and finance. Owing to the increasing availability and ease of access to Islamic services, Islamic finance has become increasingly important not only in Muslim countries, but around the world, making it a global industry. Under the Gulf Cooperation Council (GCC) as well as in some regions, such as the Middle East and North Africa, a dual financial system is implemented, where Sharia-compliant products are marketed alongside conventional financial systems.In this thoroughly researched collection of chapters, researchers from around the world examine the role of Islamic finance in the economies and prospects of different companies. They discuss Islamic finance literature from both theoretical and empirical perspectives. The theoretical section of the book consists of conceptual chapters that enable readers to critically evaluate and expand their understanding of accounting and finance. The chapters in the empirical section of this handbook discuss and interpret empirical evidence to provide clear implications for practice, research, and society. This section bridges the gap between theory and practice and offers suggestions for future research. Islamic Accounting and Finance is geared towards scholars and students, but it is also of use to banking and finance practitioners.

Download or read book Islamic Banking and Finance written by Mondher Bellalah and published by Cambridge Scholars Publishing. This book was released on 2013-07-16 with total page 295 pages. Available in PDF, EPUB and Kindle. Book excerpt: Islamic finance is founded on principles that constitute the guidelines governing any Islamic economic or financial dealings. Innovative financial engineering today constitutes one of the most critical needs of Islamic financial institutions. It represents the forces that will drive Islamic finance toward continuous growth and efficiency. The structuring of new financing and Shariah-complaint instruments plays an important role in the enhancement of Islamic financial markets, and Islamic risk management practices, combining basic Shariah-complaint financial instruments within Shariah structures to precise identified needs. The financial engineering process in Islamic finance is a process that is very sensitive and complex. It requires multidisciplinary considerations, involving deep knowledge of finance, economy, Shariah law and commercial law. Divergence of opinions among different Shariah scholars and boards, as well as the absence or lack of effectiveness of a central regulatory body, is perceived as an obstacle to the growth of investment confidence in Islamic finance. Hence, innovation, along with greater uniformity, is essential to make Islamic finance an international financial system and to attract a greater number of customers. This book addresses the main issues of concern within Islamic banking, namely the development of conceptual framework, the viability of interest-free banking, and the assessment of its performance and future. In a world where conventional interest-based finance is the dominant framework, Islamic banking faces many challenges that must be addressed. This book discusses these issues and challenges and will be of great interest to both researchers and practitioners. It analyses the past experiences of Islamic banks worldwide, and provides an objective assessment of their successes and failures.

Download or read book Liquidity Risk Profitability and Cost Efficiency of Islamic Banks written by Abdulfattah Abdulganiyy and published by LAP Lambert Academic Publishing. This book was released on 2018-06-14 with total page 196 pages. Available in PDF, EPUB and Kindle. Book excerpt: Liquidity Risk, Profitability and Cost Efficiency of Islamic Banks discusses major issues faced by banks following the 2008 Global Financial Crisis and 2014 oil price fall. The absence of Shariah-compliant liquidity instruments accentuate liquidity problems particularly in Islamic banks. The banks also face cost efficiency issues in addition to liquidity risk that affect their profitability. The book examines liquidity risk determinants of Islamic banks in ten countries from Organization of Islamic Co-operation (OIC) comprising Bahrain, Indonesia, Iran, Kuwait, Malaysia, Pakistan, Saudi Arabia, Sudan, Turkey and United Arab Emirate. Profit and Loss Sharing (PLS) contract and profitability were studied as mediators to explain the process through which relationship between liquidity risk and cost efficiency is affected. The study contributes new findings in terms of reaffirming the reluctance of Islamic banks to use PLS contract since it increases liquidity risk.

Download or read book Influential Factors on Profitability of Islamic Banks written by Ahmed Nourrein Ahmed Mennawi and published by . This book was released on 2020 with total page 13 pages. Available in PDF, EPUB and Kindle. Book excerpt: Profitability of Islamic banks has a significant effect on banks current and future decisions that do not only associate with shareholders and management, but also for various types of stakeholders. Despite that, scholars are not yet agreement on common determinants of profitability in banking industry. This study aims to investigate the effect of bank-specific and industry characteristics along with macroeconomic variable (the inflation) on the profitability of a sample of 10 Islamic banks in Sudan. The study applied descriptive statistics, Persons' correlation and multiple regression analysis on secondary data in order to determine the relationships and degree of significant of the independent variables to profitability. The profitability has been measured by two models; as return on assets (ROA) and net profit margin (NPM). The results reveal that bank capitalization (EQTA), operational cost efficiency (OCOI), investment in short-term securities (SECA) and inflation (INF) variables are significantly affecting the profitability of Islamic banks in Sudan. In contrary, the deposit-size of the bank (as market share) is not a significant determinant of banks' profitability. Furthermore, the results indicate that quality of credit loan (NPL) is highly significant to NPM, while it is insignificant to ROA.

Download or read book Determinants of Profitability in Islamic Banks written by Abdel-Hameed M. Bashir and published by . This book was released on 2018 with total page 27 pages. Available in PDF, EPUB and Kindle. Book excerpt: The paper analyzes how bank characteristics and the overall financial environment affect the performance of Islamic banks. Utilizing bank level data, the study examines the performance indicators of Islamic banks across eight Middle Eastern countries between 1993 and 1998. A variety of internal and external banking characteristics were used to predict profitability and efficiency. In general, our analysis of determinants of Islamic banks' profitability confirms previous findings. Controlling for macroeconomic environment, financial market structure, and taxation, the results indicate that high capital-to-asset and loan-to-asset ratios lead to higher profitability. The results also indicate that foreign-owned banks are likely to be profitable. Everything remaining equal, the regression results show that implicit and explicit taxes affect the bank performance and profitability negatively while favorable macroeconomic conditions impact performance measures positively. Our results also indicate that stock markets and banks are complementary to each other.

Download or read book An Overview of Islamic Finance written by Mr.Mumtaz Hussain and published by International Monetary Fund. This book was released on 2015-06-02 with total page 35 pages. Available in PDF, EPUB and Kindle. Book excerpt: Islamic finance has started to grow in international finance across the globe, with some concentration in few countries. Nearly 20 percent annual growth of Islamic finance in recent years seems to point to its resilience and broad appeal, partly owing to principles that govern Islamic financial activities, including equity, participation, and ownership. In theory, Islamic finance is resilient to shocks because of its emphasis on risk sharing, limits on excessive risk taking, and strong link to real activities. Empirical evidence on the stability of Islamic banks, however, is so far mixed. While these banks face similar risks as conventional banks do, they are also exposed to idiosyncratic risks, necessitating a tailoring of current risk management practices. The macroeconomic policy implications of the rapid expansion of Islamic finance are far reaching and need careful considerations.

Download or read book Profitability Determinants of Islamic Banking in Sri Lanka written by Hiruni Kaushala and published by . This book was released on 2017 with total page 19 pages. Available in PDF, EPUB and Kindle. Book excerpt: Amana Investments was established in 1997 as the first Islamic bank in Sri Lanka. Islamic Finance is Sharia compliant finance because and is based on the teachings in the Holy Quran and sacred scripture of the religion of Islam. The aim of this research is to provide an overview on the Islamic Finance Industry of Sri Lanka by identifying the factors that affect the profitability of the industry. The profitability of Islamic banks is measured by three dimensions, i.e. return on assets, and return on equity, earnings per share. Internal explanatory variables include bank size, gearing ratio, asset management, deposit ratio, non-performing loans ratio, asset composition, capital adequacy ratio and operating efficiency, whereas external explanatory variables include gross domestic product (GDP) and consumer price index (CPI). Since Islamic Banking is a relatively new industry within Sri Lanka, there is a high potential to make profits by considering the components of the ratios used as independent variables in the study. Although some components indicated to be profitable, the risk associated with those variables and the other factors such as liquidity and profitability also have to be considered. Results were similar to the other researches done for other countries.

Download or read book The Performance of Islamic Versus Conventional Banks written by Mona Mohammad-Toufic Omeiche and published by . This book was released on 2010 with total page 108 pages. Available in PDF, EPUB and Kindle. Book excerpt: From the onset of Islamic banking operations, practitioners and individuals pondered on whether Islamic banks are more profitable than their conventional peers, and if yes, why. The thesis aims at identifying the internal determinants (proxied by financial ratios) and external determinants (proxied by country macroeconomic indicators) that can influence bank performance for a sample of 41 Islamic and 132 conventional banks in the Middle East region during the period 2001-2008. The study examines whether Islamic banks are more profitable than their peers and whether more specifically GCC Islamic banks are more profitable than their peers. It tests for the size effect on banks profitability and whether Islamic and conventional banks have similar internal and external characteristics.--Our sample results indicate that Islamic banks were more profitable and more capitalized, but less cost efficient than conventional banks. The regression results indicate that Islamic banks' profitability is positively related to GDP growth rate, while those of conventional banks do not suggest a significant relation between any of the studied macroeconomic indicators and the profitability of conventional banks. --When comparing Islamic banks across the Middle East region, Islamic banks operating in the GCC area were more profitable than their peers in other Arab countries, and that larger Islamic banks were more successful than smaller banks. Finally, we show that Islamic and conventional banks do not have similar internal characteristics.

Download or read book Effect of Interest Rates and Bank Size on Profitability of Islamic Banks in an Interactive Model written by Muhammad Muzammil and published by . This book was released on 2020 with total page 43 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper is aimed at studying the role of interest rates and bank size along with other macroeconomic and firm-level factors in determining the Islamic bank's profitability. We also explored the intricate complementarities of these two factors in the relationship between Profitability and bank-level factors. Other macro variables like GDP, Inflation and Exchange rate were taken as control. We have used the interaction effect of Bank-level variables like spread, efficiency, default risk, capital adequacy, liquidity, and leverage which were taken as predictors on profitability. Profitability was measured by Return on Asset and Equity. Data from full fledge Islamic banks in Pakistan was taken during the period of 2006-2018. These Islamic banks included were Al Baraka Bank Pakistan Ltd, BankIslamiPakistan Ltd (BIPL), Dubai Islamic Bank Pakistan Ltd (DIB), and Meezan Bank Limited. The regression analysis shows there is a significant impact of macroeconomic indicators, bank-specific variables, and interaction effect of interest and size on the Islamic bank's profitability. The interest rate and exchange rate have a negative and significant impact on ROE. Whereas Asset Quality, Gearing, and Capital Adequacy seem to have a positive and significant effect on profitability. Bank specific variables such as credit risk, spread ratio, and size also seem to negatively affect profitability. With regards to interaction effect, both size and interest rate seems to complement the effect of Asset Quality, Credit Risk, Spread Ratio on Profitability. However, both size and interest rates have a negative complementary with gearing in predicting profitability. Therefore, this study will help the policymakers, regulars, and bank management to identify the key drivers of profitability so they can increase the profitability of Islamic Banks in Pakistan.

Download or read book The Efficiency of Islamic Banking Industry written by Fadzlan Sufian and published by . This book was released on 2018 with total page 38 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper investigates the performance of Malaysian Islamic banking sector during the period of 2001-2005. Several efficiency estimates of individual banks are evaluated using non-parametric Data Envelopment Analysis (DEA). Two different approaches have been employed to differentiate how efficiency scores vary with changes in inputs and outputs. To examine the impact of risk factor on Islamic bank efficiency, we have incorporated problem loans as a nondiscretionary input variable in our analysis. The findings suggest that during the period of study, scale inefficiency dominates pure technical inefficiency in the Malaysian Islamic banking sector. We found that foreign banks have exhibited higher technical efficiency compared to their domestic peers. The inclusion of risk factors has mixed impact on Malaysian Islamic banks' efficiency. The results seems to suggest that while potential economies of scale may be overestimated when risk factors are excluded, pure technical efficiency estimates on the other hand, tend to be much more sensitive to the exclusion of risk factors. The empirical results from the Spearman and Pearson tests reinforce these findings.

Download or read book Determinants of Profitability of Islamic Banking Industry written by Muhammad Mahmood Shah Khan and published by . This book was released on 2016 with total page 20 pages. Available in PDF, EPUB and Kindle. Book excerpt: The financial sector plays a vital role in the expansion and growth of an economy. The essential factor for the financial growth of a country is a stable banking system. Over the past few years, Islamic banking industry of Pakistan has grown substantially, however, it faces many challenges regarding its financial stability. This study tries to assess factors that affect the profitability of Islamic banking industry over the period of 2007 to 2014. Return on assets (ROA), return on equity (ROE), and earnings per share (EPS) are used as dependent variables. Bank's size, gearing ratio, non-performing loans (NPL) ratio, operational efficiency, asset composition, asset management, capital adequacy ratio, deposit ratio, gross domestic product (GDP), and consumer price index (CPI) are used as independent variables. Findings of the study indicate that measures of Islamic banking profitability are significantly affected by bank-specific factors such as gearing ratio, asset management, deposit ratio, and NPL ratio and external factor such as CPI.

Download or read book The Determinants of the Pakistan Islamic Banking Industry Profitability written by Farrukh Ijaz and published by . This book was released on 2015 with total page 16 pages. Available in PDF, EPUB and Kindle. Book excerpt: The financial sector plays an important role in the economic and fiscal development of a country. A well-built and vigorous banking system is a precondition for the sustainable financial growth of a country. Over the past few years, Islamic banking industry of Pakistan has been facing many problems and challenges to maintain the financial stability. To overcome this issue, it is vital to classify the factors that mostly impact the overall profitability of Islamic banks in Pakistan. Two models were used alternatively for ROA and ROE as dependent variable. A set of internal factors were considered as independent variables including: bank's size, gearing ratio, operational efficiency, asset management and capital adequacy ratio for the time period 2006-2013. The results indicate that different measures of profitability depend upon different bank specific factors. The study found that profitability of Islamic banks depends on the leverage ratio, operating efficiency, asset management and bank size. Further research can be extended to explore the above findings and to include some other internal factors such as general bank charges, doubtful loans or reserves ratios, and external factor such as GDP, exchange rate and CPI as well.