scholarly journals The governance, risk-taking, and performance of Islamic banks

2016 ◽  
Vol 51 (2) ◽  
pp. 195-219 ◽  
Author(s):  
Sabur Mollah ◽  
M. Kabir Hassan ◽  
Omar Al Farooque ◽  
Asma Mobarek
Keyword(s):  
Risk Taking ◽  
Islamic Banks ◽  
And Performance ◽  
Governance Risk

scholarly journals Corporate Governance, Risk-taking and Efficiency of Islamic Banks: Comparative Study Between Pakistan and Malaysia

2021 ◽  
Vol 1 (1) ◽  
pp. 45-55
Author(s):  
Qaiser Abbas
Keyword(s):  
Comparative Study ◽  
Technical Efficiency ◽  
Risk Taking ◽  
Negative Impact ◽  
Banking System ◽  
Supervisory Board ◽  
Analysis Data ◽  
Scale Efficiency ◽  
Islamic Banks ◽  
Governance Risk

Purpose: This study aims to compare the governance, risk-taking, and efficiency of pure Islamic Banks between Pakistan and Malaysia. Design: Total 9 years of data from 2009 to 2017 used for analysis. Data Envelopment Analysis (DEA) has been used for the measurement of Islamic bank's efficiency. Efficiency has been measured by (Technical Efficiency, Pure Technical Efficiency, and Scale Efficiency). Z-score has been used to measure risk-taking. Results: This comparative study shows that Shariah Supervisory Board has a significant impact only on Malaysian Islamic Banks with technical, pure technical, and scale efficiency. At the same time, board independence has a meaningful relationship with the efficiency of IBs of both countries. Board meetings significantly impact Pakistani Banks' pure technical efficiency while it substantially affects Malaysian banks' technical efficiency. Results also show that risk-taking has a significant negative impact on the efficiency of both countries. Implications: Pakistani Islamic banks should focus more on Shariah Supervisory Boards to develop the Islamic Banking system in Pakistan because it significantly impacts the Efficiency of Malaysian IBs.

Does the Shariah committee influence risk-taking and performance of Islamic banks in Malaysia?

2020 ◽  
Vol 11 (9) ◽  
pp. 1739-1755
Author(s):  
Mansor Isa ◽  
Siew-Peng Lee
Keyword(s):  
Panel Data ◽  
Risk Taking ◽  
Design Methodology ◽  
Bank Risk ◽  
Islamic Banks ◽  
Content Type ◽  
Banking Business ◽  
And Performance ◽  
The Relationship ◽  
Practical Implications

Purpose This study aims to investigate how the Shariah committee in Islamic banks affects banks’ risk-taking behaviour and performance. Design/methodology/approach The sample is based on a panel data of 15 Islamic banks in Malaysia over the period 2007–2016. The generalised least squares random-effects method is used to study the relationship between the Shariah committee and bank risk-taking and performance. Findings The findings suggest that the number of committee members with Shariah qualification and the number of reputable members are negatively related to risk-taking while members with finance/banking qualifications are positively related. On the financial performance, evidence of two variables that are positively related to performance, namely, members with finance/banking qualification and reputable members was found. Female participation is weakly negatively related to risk-taking but unrelated to performance. Other variables, such as committee size, years of experience and frequency of meetings, are found to be unrelated to risk-taking and performance. Practical implications The paper points to two implications. First, the roles and functions of the Shariah committee should be revised to emphasise Shariah-compliance, as well as the business aspects of the banking operations. Second, the regulators should also look at the composition of the Shariah committee to ensure a diversity of expertise related to the banking business. Originality/value This paper extends the scope and coverage of previous studies by investigating the attributes of the Shariah committee, which could be important in influencing the risk-taking behaviour and performance of banks.

Internal Control Quality and Bank Risk-Taking and Performance

2020 ◽  
Author(s):  
Matthew Baugh ◽  
Matthew Ege ◽  
Christopher G. Yust
Keyword(s):  
Internal Control ◽  
Risk Taking ◽  
Downside Risk ◽  
Internal Controls ◽  
Bank Risk ◽  
Material Weakness ◽  
Control Quality ◽  
Interest Income ◽  
Upside Risk ◽  
And Performance

Using a sample of bank-years from 2005 to 2017, we examine the effect of internal control quality on future risk-taking and performance. We find that banks that disclose a material weakness in internal controls have higher risk-taking and worse performance in the future, including having a higher (lower) likelihood of experiencing large losses (gains). These findings suggest that weak controls increase (reduce) downside (upside) risk-taking or conversely that strong controls increase (reduce) upside (downside) risk-taking. Path analyses suggest that 22.3 to 43.7 percent of the effect of internal control quality on future performance is through risk-taking. Additionally, material weaknesses are negatively associated with total asset, loan, interest income, and non-interest income growth, suggesting that internal control quality affects both core and non-core activities of banks. Overall, results suggest that strong internal controls improve bank risk-taking, in part through asymmetrically reducing downside risk-taking while facilitating upside risk-taking, ultimately improving bank performance.

Does corporate governance affect the performance of Islamic banks? New insight into Islamic countries

2020 ◽  
Vol 20 (6) ◽  
pp. 1073-1090 ◽  
Author(s):  
Ejaz Aslam ◽  
Razali Haron
Keyword(s):  
Corporate Governance ◽  
Audit Committee ◽  
Positive Impact ◽  
Islamic Banks ◽  
Governance Mechanism ◽  
Method Of Moment ◽  
Content Type ◽  
Return On Equity ◽  
Islamic Countries ◽  
And Performance

Purpose Corporate governance plays a significant role to overcome agency issues and develop the culture of transparency and openness. In this context, this paper aims to examine how corporate governance mechanisms affect the performance of Islamic banks (IBs). Design/methodology/approach Stepwise, two-step system generalize method of moment estimation technique is used in the analysis in which control variables are added into the model sequentially. This study used data on 129 IBs from 29 Islamic countries (Middle East, South Asia and Southeast Asia) during the period of 2008 to 2017. Findings The findings suggest that the audit committee (AUDC) and Shariah board (SB) have positive impact on the performance of IBs (return on assets and return on equity). However, board size and risk management committee have negative and significant effect on the performance of IBs. CEO duality and non-executive directors have mixed relationship with the performance of IBs. These results support the argument that IBs need to improve their financial performance through appropriate governance mechanism. Research limitations/implications The findings of the study added a new dimension to the governance research that could be a valuable source of knowledge for policymakers and regulators to improve the existing governance mechanism for better performance of IBs. Originality/value The study fills the gap in the literature by addressing the issue of corporate governance on performance of IBs across countries. Agency theory is discussed to explain the relationship between corporate governance mechanism and performance.

An Islamic Bank's Customers' Approach to Gamify Mobile Banking

2021 ◽  
Vol 11 (4) ◽  
pp. 23-40
Author(s):  
Aysegul Sagkaya Gungor ◽  
Yusuf Ihsan Kurt
Keyword(s):  
Mobile Banking ◽  
Islamic Banks ◽  
Banking Services ◽  
Performance Expectancy ◽  
Promising Tool ◽  
And Performance ◽  
And Gender ◽  
Facilitating Conditions ◽  
Behavioral Intention To Use ◽  
Positive Effect

Making customers adopt mobile banking is a great challenge for banks, and especially for Islamic banks. This study investigates the factors that could predict the customers' use intention of the mobile banking services of Islamic banks by applying the conceptual model of UTAUT2. The model was further extended with gamification, as a promising tool to ease the adoption, while discussing the moderating effect of age and gender for all variables. The applied questionnaire to collect data has resulted in 205 respondents. The findings implied that facilitating conditions, habit, price value, and performance expectancy are effective variables in Islamic banking customers' behavioral intention to use m-banking. Gamification has a positive effect only when customers are younger than 30. It is further discovered that only the customers 30 and older had performance expectancy. Regarding gender differences, the only finding is the men's greater interest in the price value.

Does bank governance affect risk and efficiency? Evidence from Islamic banks in GCC countries

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Samir Srairi ◽  
Khawla Bourkhis ◽  
Asma Houcine
Keyword(s):  
Risk Management ◽  
Financial Crisis ◽  
Risk Taking ◽  
Audit Committee ◽  
Governance Structure ◽  
Board Structure ◽  
Islamic Banks ◽  
Bank Efficiency ◽  
Content Type ◽  
Gcc Countries

Purpose The motivation of the study is to shed further light on the question of whether the governance structure of Islamic banks (IBs) has an impact on the efficiency and risk of Islamic banks operating in the Gulf Cooperation Council (GCC) after the global financial crisis and during the period 2010–2018. This study aims to examine the extent of governance structure on the efficiency and risk of IBs as the effect of the financial crisis has been less on IBs. In addition, the authors are interested in the GCC region as it represents the hub of Islamic finance. Design/methodology/approach In this study, the authors examine how the banking governance structure affects the risk-taking and performance of IBs in the GCC countries between 2010 and 2018. The authors construct a banking governance index (CGI) composed of sub-indices for the board structure, risk management, transparency and disclosure, audit committee, Sharia supervisory board and investment account holders. Unlike the majority of previous studies, bank performance is measured with technical efficiency scores using a data envelopment analysis and the authors use a comprehensive CGI. Findings The results show that IBs in GCC countries adhere to 54% of the attributes covered in the CGI. The authors also note a lack of disclosure regarding the investment account holders and the audit committee. As well, the results indicate that bank governance is positively associated with risk-taking and bank efficiency. Banking risk is influenced by the Sharia board and risk management while bank efficiency is affected by the characteristics of the board structure and investment account holders. Originality/value To the best of the authors’ knowledge, this is the first study that has developed a comprehensive governance index for IBs in GCC countries that includes a wide range of governance dimensions. The study contributes to the literature on governance in the banking sector by simultaneously examining its impact on the risk-taking and efficiency of IBs and recognizes the dynamic relation between these three variables for IB.

scholarly journals Entrepreneurial Mindset and Performance of Small and Medium Scale Enterprises in Makurdi Metropolis, Benue State-Nigeria

2018 ◽  
Vol 6 (2) ◽  
pp. 124-146 ◽  
Author(s):  
Emmanuel Lubem Asenge ◽  
Hembadoon Sarah Diaka ◽  
Alexander Terna Soom
Keyword(s):  
Social Sciences ◽  
Risk Taking ◽  
Sampling Method ◽  
Critical Factor ◽  
Major Effect ◽  
Policy Makers ◽  
Medium Scale ◽  
Business Opportunities ◽  
And Performance ◽  
Selection Of

Many studies indicates that entrepreneurial mindset is a critical factor in the accumulation, evaluation and selection of the knowledge which can lead an individual into potential business opportunities thereby enhancing entrepreneurial outcomes such as firm performance. This study examined the effect of entrepreneurial mindset on the performance of small and medium scale enterprises in Benue State. The focus of the research was to measure the entrepreneurs’ mindset exhibited through innovativeness, creativity, business alertness and risk taking and how these attributes contributed to the performance of SMEs. The research focused on a population of 650 small and medium scale enterprises based in Makurdi metropolis. A questionnaire was used to collect data from a sample of 250 SMEs in Makurdi metropolis which were selected through stratified random sampling method. Collected data were analyzed using descriptive and inferential statistics with the aid of Statistical Package for Social Sciences (SPSS). Correlation and multiple regression analysis were employed to analyse the data and test the hypotheses. The study revealed that innovativeness, creativity, business alertness and risk taking were significant in affecting performance of SMEs. The study concluded that entrepreneurial mindset or lack of it has a major effect on SMEs performance and if any economy is bended towards development and growth, it would have to embrace this concept. It recommended that all the policy makers and all stake holders should re-strategize and create forums that can promote entrepreneurial mindset among the existing and potential entrepreneurs.

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