scholarly journals Performance and productivity in Islamic and conventional banks: Evidence from the global financial crisis

2019 ◽  
Vol 79 ◽  
pp. 1-14 ◽  
Author(s):  
Christos Alexakis ◽  
Marwan Izzeldin ◽  
Jill Johnes ◽  
Vasileios Pappas
Keyword(s):  
Financial Crisis ◽  
Global Financial Crisis ◽  
Conventional Banks ◽  
The Global Financial Crisis

scholarly journals Doing Good or Avoiding Evil? An Explorative Study of Depositors’ Reasons for Choosing Social Banks in the Pre and Post Crisis Eras

2020 ◽  
Vol 12 (23) ◽  
pp. 10082 ◽  
Author(s):  
Nikolas Höhnke
Keyword(s):  
Financial Crisis ◽  
Online Survey ◽  
Global Financial Crisis ◽  
Target Groups ◽  
The Social ◽  
Before And After ◽  
Great Relevance ◽  
Conventional Banks ◽  
The Individual ◽  
The Global Financial Crisis

The global financial crisis is expected to be of great relevance for social banks’ growth of deposits. However, it is still unclear why depositors choose social banks in general, and how the global financial crisis has affected depositors’ choice of social banks. The present paper thus explores a comprehensive set of reasons for choosing social banks, the individual relevance of reasons, as well as differences before and after the global financial crisis. Data was collected through a survey of five social banks, interviews with nine industry experts, and an online survey with 108 social and 413 conventional depositors. Using content analysis, a multi-level system of reasons for choosing social banks was identified, which refers to the social banks’ “good” and conventional banks’ “evil” characteristics. Based on a frequency analysis of codings per category, reasons with potential superior relevance for depositors’ decision-making were explored. A comparison with reasons for choosing conventional banks imply that depositors’ reasons for choosing social banks differ from those for choosing conventional banks in general. The results also indicate that the global financial crisis might have helped social banks’ growth by attracting new customer target groups, who chose social banks because of conventional banks’ “evil” characteristics.

scholarly journals Effects of the Global Financial Crisis on the Agency Cost of Islamic Banks and Conventional Banks

2017 ◽  
Vol 4 (1) ◽  
pp. 44
Author(s):  
Talla M Aldeehani
Keyword(s):  
Financial Crisis ◽  
Global Financial Crisis ◽  
Gulf Cooperation Council ◽  
Agency Cost ◽  
Islamic Banks ◽  
Empirical Testing ◽  
Before And After ◽  
The Status ◽  
Conventional Banks ◽  
The Global Financial Crisis

In this paper, we investigate the effect of the 2008 global financial crisis on the agency cost (AC) of Islamic banks (IBs) and conventional banks (CBs). Many pioneering scholars (see, for example, Archer et al., 1998) have recognized fundamental differences in the capital structures and risks of IBs compared to CBs and called for more empirical testing of these issues. This effort is in response to those calls. Focusing on AC, we collected data for all Gulf Cooperation Council (GCC) banks satisfying the period from 2001-2014. The data was split into “before” and “after” the 2008 crisis. Although statistically insignificant, the analysis shows higher AC for IB compared to CBs before and after the crisis. However, we provide evidence of significant differences in AC causal models for the two types of banks. For conventional banks, only profitability factors explain variability in AC before and after the crisis. For Islamic banks, however, in addition to profitability, liquidity, deposits and financing facilities matter depending on the status of the economy. We provide further discussions, implications, and recommendations.

scholarly journals Financial System Stability in Indonesia during The Global Financial Crisis 2007/2008: Conventional vis-à-vis Islamic

2015 ◽  
Vol 2 (2) ◽  
pp. 136
Author(s):  
Muh. Rudi Nugroho ◽  
Ibnu Qizam
Keyword(s):  
Financial Crisis ◽  
Financial Stability ◽  
Global Financial Crisis ◽  
Internal Variable ◽  
Islamic Banks ◽  
Z Score ◽  
Internal Factors ◽  
Macroeconomic Factors ◽  
Conventional Banks ◽  
The Global Financial Crisis

This research aims to analyze the financial stability especially in dual banking system in Indonesia and discusses the role of Islamic banks in the financial stability of national banks. In addition, this study also focuses on the analysis of the determinants of financial stability namely on the national banking Industry. This research uses panel data in which combined data between time series and cross section with an observation periods are 2005:1 - 2009:1 by using an internal variable of banks and macroeconomic data. Z-score analysis will be used as main tool analysis regressed with internal variable. Empirical results obtained from this research shows that during the period of 2005:1 - 2009:1 banking financial stability, for both conventional and Islamic and categorized based on an asset scale, the movement of the Z-score value is different. From the Z-score values analysis shows that Islamic banks are the most stable bank with a trend increased sharply when compared with other banks, namely conventional couterparts. If viewed from each category, small conventional banks more stable than small Islamic banks, and there are declining trend in 2005:1 to 2009:1. Whereas for large and middle conventional banks the trend of the Z-score movement are in the same patterns. This study also founds that the determinant of the banking stability can be seen from two sides namely bank's internal factors and macroeconomic factors. Internal factors consist of: Income Diversity (ID), Credit or Financing (Loan), Total Assets (TA), Operational Cost (Cost), Cost Income (CI), Loan Asset (LA), Current Liability (CL), Cash to Current Liabilities (CCL), Capital Bank (MDL). While macroeconomic factors consist of: inflation, BI Rate, Exchange Rate, Composite Index (JCI), the Gross Domestic Product (GDP). This research also examined the extent to which the role of Islamic banks and the global financial crisis to the financial stability of national banking. This analysis shows that the global financial crisis and Islamic banks affect significantly to the financial stability of banking industries in Indonesia.

How crisis-proof is Islamic finance?

2018 ◽  
Vol 10 (4) ◽  
pp. 415-426 ◽  
Author(s):  
Hasnan Baber
Keyword(s):  
Financial Crisis ◽  
Financial Crises ◽  
Global Financial Crisis ◽  
Islamic Finance ◽  
Islamic Banks ◽  
Actual Performance ◽  
Content Type ◽  
Current Financial Crisis ◽  
Conventional Banks ◽  
The Global Financial Crisis

PurposeThis paper aims to explore Islamic finance’s resilience in times of financial crisis and considers Islamic finance’s viability as an alternative to the current financial system.Design/methodology/approachEstablished on a review of theoretical aspects underlying the notion of Islamic finance being proficient of reducing the harshness of financial crises and a latent solution to financial volatility, this paper assesses actual performance of Islamic and conventional banks during and in the repercussion of the current financial crisis. Interviews were also conducted with managers of Islamic banks.FindingsThe paper concludes that performance of Islamic banks during the global financial crisis is found to be supportive of their argued resilience and consistency. However, the latest financial crisis has brought to light a number of theoretical and realistic issues that challenge Islamic finance and its absorbing capacity against financial crises.Originality/valueThe paper is an original work which suggests about moderating risks and proposing various ways in which the Islamic finance can be made more stable and resilient.

scholarly journals COMPARATIVE ANALYSIS OF BANK STABILITY IN INDONESIA: A NON-PARAMETRIC APPROACH ON DIFFERENT BANKING MODELS

2018 ◽  
Vol 3 (2) ◽  
Author(s):  
Norzitah Abdul Karim ◽  
Syed Musa Syed Jaafar Alhabshi ◽  
Salina Kassim ◽  
Razali Haron
Keyword(s):  
Financial Crisis ◽  
Financial Intermediation ◽  
Global Financial Crisis ◽  
Islamic Banks ◽  
Sample Period ◽  
Bank Stability ◽  
Conventional Banks ◽  
The Global Financial Crisis ◽  
The Impact ◽  
Non Parametric

The present study, grounded in theory of financial intermediation, provides new empirical evidence on comparison of bank stability measures of Islamic banks, conventional banks and other bank models in Indonesia. Specifically, 72 conventional banks, 4 Islamic banks, 3 conventional banks with Islamic subsidiaries and 2 subsidiary Islamic banks in Indonesia are considered, focusing on the sample period of 1999-2015. The study adopts z-score as a measure of bank stability, while a non-parametric multiple comparison analysis was used to test the significance of the differences in the bank stability of the different bank models, namely Islamic banks, conventional banks, Subsidiary Islamic banks and conventional banks with Islamic subsidiaries. The sample period is further divided into three sub-periods, namely, before the global financial crisis (1999-2006), during the global financial crisis (2007-2009) and after the global financial crisis (2010-2015) so as to gain more detail findings on the impact of the global financial crisis on the banks’ stability. The impact of local crisis periods (1999-2001) on bank stability of different bank models is also investigated. Findings of this study contribute towards extending the theory of financial intermediation through empirical works of stability of different banking models namely Islamic banks, conventional banks, Subsidiary banks and conventional banks with Islamic subsidiaries.

scholarly journals Profitability Determinants of Kuwait Banking Industry: Comparative Analysis between Islamic and Conventional Banks

2018 ◽  
Vol 11 (1) ◽  
pp. 1
Author(s):  
Muhamad Abduh ◽  
Mohamed Saeed Issa
Keyword(s):  
Financial Crisis ◽  
Credit Risk ◽  
Banking Sector ◽  
Global Financial Crisis ◽  
Islamic Banking ◽  
Macroeconomic Conditions ◽  
External Variables ◽  
Conventional Banks ◽  
The Global Financial Crisis ◽  
The Impact

<p><em>This study is aimed at evaluating the impact bank specific and macroeconomic variables including the global financial crisis upon the performance of Islamic and conventional banks in Kuwait. The data are collected from nine banks operated in Kuwait over the period of 2005 to 2012 with four of them are Islamic banks and five are conventional banks. The ROA and ROE are used to measure profitability while the size, credit risk, bank diversification, efficiency, capital strength, and liquidity were used to measure bank specific variables. There are also three external variables that would be used to measure macroeconomic condition i.e. GDP growth, inflation, and financial crisis. The findings from pooled OLS have shown that credit risk, liquidity and efficiency significantly affecting profitability for both Islamic and conventional banks. For macroeconomic conditions, GDP is positively significantly affecting profitability of Islamic banking sector, while inflation is negatively affecting the profitability of conventional banking sector. The result also evidence that Islamic banking sector is more stable than the conventional banking sector in terms of their performance during and after the crisis period.</em></p>

scholarly journals Examining the Relationship between Efficiency and Capital Adequacy Ratio: Islamic versus Conventional Banks --- An Empirical Evidence on Egyptian Banks

2018 ◽  
Vol 7 (2) ◽  
pp. 232 ◽  
Author(s):  
Hassan Mohamed Mohamed Hafez
Keyword(s):  
Financial Crisis ◽  
Significant Relationship ◽  
Global Financial Crisis ◽  
Negative Relationship ◽  
Capital Adequacy ◽  
Islamic Banks ◽  
Conventional Banks ◽  
The Global Financial Crisis ◽  
High Level ◽  
The Relationship

This paper aims to investigate the relationship between the efficiency of banks in Egypt and capital adequacy ratios. We collected data on a sample of 40 banks comprising Islamic banks, conventional and conventional banks with Islamic windows pre and post the global financial crisis from year 2002 to 2015. We used data envelopment analysis liner programming (DEA) to calculate the efficiency of banks then we used a panel regression analysis through the application of Eviews software to investigate the relationship between the efficiency of banks and capital adequacy ratios. Pre the financial crisis, results, concluded that, there is a significant positive relationship between the efficiency of banks and capital adequacy ratios, credit risk, profitability, bank size and the quality of management. Whilst a significant negative relationship with the liquidity. The efficiency of conventional banks outperformed the efficiency of Islamic and conventional banks with Islamic windows. The increase in capital follows an increase in the level of risk borne by banks and increases capital adequacy ratios which leads to a rise in the loan portfolio and therefore, increase the level of loans provisions, which confirms the high level of efficiency for banks. Capital increase provide an additional protection against any additional risks. Post the financial crisis, the efficiency of banks has been affected especially for conventional banks. The efficiency of conventional and conventional banks with Islamic windows shows a negative significant relationship with capital adequacy ratios. The efficiency of Islamic banks outperformed other banks and shows a positive significant relationship with capital adequacy ratios. Results revealed that the efficiency of banks determines the level of capital and risk borne by banks.

Determinants of banks’ risk-taking behavior, stability and profitability: evidence from GCC countries

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Abdulazeez Y.H. Saif-Alyousfi ◽  
Asish Saha
Keyword(s):  
Financial Crisis ◽  
Risk Taking ◽  
Global Financial Crisis ◽  
Generalized Method Of Moments ◽  
Macroeconomic Factors ◽  
Content Type ◽  
Risk Taking Behavior ◽  
Conventional Banks ◽  
The Stability ◽  
The Global Financial Crisis

Purpose This paper aims to examine the effect of bank-specific, financial structure and macroeconomic factors on the risk-taking behavior, stability and profitability of banks in Gulf Cooperation Council (GCC) economies during 1998–2017. Design/methodology/approach The authors use a two-step system generalized method of moments dynamic model to analyze the data. Findings The results show that non-traditional activities increase the risk and decrease the stability and profitability of banks that are highly capitalized, highly liquid and large. Banks in this group are less engaged in securities investments and their higher degree of loan exposure leads to a decrease in risk and an increase in their stability and profitability. Higher concentration increases the risk and decreases the stability and profitability of banks that are less capitalized, less liquid and small. Banks with a higher share of non-traditional activities are riskier and less stable and less profitable before the financial crisis. The study finds that banks with relatively higher capitalization and high lending growth rates are riskier, profitable and less stable during the crisis. Larger commercial banks are less risky and more stable and profitable than smaller banks before the global financial crisis. Islamic banks performed better in terms of fee income, capitalization, liquidity, asset quality and have higher market concentration than conventional banks. Originality/value The study provides the first comprehensive empirical evidence on the drivers of risk-taking behavior, stability and profitability of the GCC banks. It also investigates the differences across these variables based on the characteristics of financial strength such as capitalization, liquidity and size; before, during and after the financial crisis; and differences between Islamic and conventional banks.

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