The impact of the Basle capital adequacy ratio regulation on the financial and marketing strategies of Islamic banks

1996 ◽  
Vol 14 (7) ◽  
pp. 32-44 ◽  
Author(s):  
Rifaat Ahmed Abdel Karim
Keyword(s):  
Marketing Strategies ◽  
Capital Adequacy ◽  
Islamic Banks ◽  
Capital Adequacy Ratio ◽  
The Impact

scholarly journals Why Banks Need Adequate Capital Adequacy Ratio? A Study of Lending & Deposit Behaviors of Banking Sector of Pakistan

2018 ◽  
Vol 4 (1) ◽  
pp. 1-16
Author(s):  
Sakina Narmeen ◽  
Irum Saba ◽  
Rehana Kouser ◽  
Haris Khurram
Keyword(s):  
Panel Data ◽  
Banking Sector ◽  
Banking Industry ◽  
Capital Adequacy ◽  
Islamic Banks ◽  
Leverage Ratio ◽  
Secondary Sources ◽  
Capital Adequacy Ratio ◽  
The Impact

This study focuses on the impact of Capital Adequacy Ratio on bank’s lending and deposit behavior and also on the importance of maintaining certain level of capital reserve. CAR is examined using two different ratios leverage ratio and risk-based capital ratio. This study is beneficial for the banking industry in determining enough CAR and to make decision for taking deposits and issuing loans. The sample of the study includes 25 banks of Pakistan; 20 conventional and 5 Islamic banks and the study period is of 10 years. Panel data methodology is used. Data is collected from secondary sources. Findings show that CAR has impact on change in capital and change in loans.

scholarly journals The Impact of Capital Adequacy Ratio (CAR) on Islamic Banks’ Performance in Selected MENA Countries

2021 ◽  
pp. 116-133
Author(s):  
ADEL Z. A. ALNAJJAR ◽  
Anwar Hasan Abdullah Othman
Keyword(s):  
United Arab Emirates ◽  
Commercial Banks ◽  
Banking Sector ◽  
Capital Adequacy ◽  
Islamic Banks ◽  
Return On Assets ◽  
Return On Equity ◽  
Mena Countries ◽  
Capital Adequacy Ratio ◽  
The Impact

A strong capital adequacy ratio is crucial to a financial institution's success and helps it to survive any potential financial crisis. From Q1 2017 to Q4 2019, the influence of the Capital Adequacy Ratio (CAR) on the performance of Commercial Islamic Banks in MENA nations (Qatar, Oman, Bahrain, Kuwait, United Arab Emirates, Saudi Arabia, and Jordan) is examined. The performance measures utilized in this study are Return on Assets (ROA) and Return on Equity (ROE). The study's sample frame comprises all Islamic commercial banks in the designated MENA nations, with a sample size of 18 Islamic commercial banks. Panel data, fixed and random models, are applied in this study since there are multiple entities and time series. The findings of the study showed that the selected Islamic banks are committed to Capital Adequacy Ratio (CAR) which is defined under Basel III. This is considered the largest percentage regulated by the Basel Committee. The study also found that there is a statistically negative significant influence of CAR on both performance indicators ROE and ROA in the commercial Islamic banks in the selected MENA countries. The results of the study can be useful to a policymaker or decision-makers in the Islamic Banks industry. First, the research could be a reference to financial regulators such as central banks which may use the findings to provide regulation on optimal capital levels for local banks in terms of regulations, deregulations, and financial disruption. Next, the practice implications in the Islamic banking sector will provide them with insight as to how a bank’s capital influences its earnings. Hence, management can work towards attaining an optimal structure that maximizes their performance as well as identifying “best” and “worst” practices associated with capitalization levels.

scholarly journals The effect of inflation, profit-loss sharing loan, and capital adequacy towards performance of Indonesian Islamic banks

2019 ◽  
Vol 2 (2) ◽  
pp. 57
Author(s):  
Luksi Visita
Keyword(s):  
Time Series Data ◽  
Capital Adequacy ◽  
Series Data ◽  
Islamic Banks ◽  
Return On Assets ◽  
Business Units ◽  
Capital Adequacy Ratio ◽  
New Perspective ◽  
Variable Influence ◽  
The Impact

The purpose of this study is to observe the impact of inflation, profit-loss sharing loan, and capital adequacy towards performance of Islamic banks in Indonesia. This study utilizes longitudinal study from 2010 to 2018 towards Islamic Commercial Banks and Sharia Business Units that are listed in Indonesia. Using pool-time series data, the variables studied are inflation, capital adequacy ratio (CAR), profit-loss sharing loan, and return on assets (ROA). The result shows that only inflation has no significant effect on performance. Capital adequacy affects positively significant, while profit-loss sharing loan affects negatively significant. This study add new perspective on how macroeconomic variable influence Islamic banks’ performance in Indonesia. Additionally, this study is also distinctive because of lengthier observation period (eight years) compared to other studies in recent five years

scholarly journals Efficiency and Rentability of Islamic Banks in Indonesia

INOVATOR ◽  
2020 ◽  
Vol 9 (1) ◽  
pp. 41
Author(s):  
Sugeng Haryanto ◽  
Yanuar Bachtiar ◽  
Wildani Khotami
Keyword(s):  
Secondary Data ◽  
Capital Adequacy ◽  
Islamic Banks ◽  
Bank Efficiency ◽  
Macroeconomic Factors ◽  
Analysis Technique ◽  
Capital Adequacy Ratio ◽  
Operating Margin ◽  
Financing Risk ◽  
Quantitative Descriptive

<table border="1" cellspacing="0" cellpadding="0"><tbody><tr><td valign="top" width="454"><p><em>This study aims to analyze the influence of macroeconomic factors, efficiency, risk, financing to deposit ratio and CAR on the rentability of Islamic banks. This research is a quantitative descriptive. The study period was conducted in 2010-2019, with quarterly data. The data source is secondary data. Data collection techniques are done by documentation. Data is taken from www.ojk.go.id and www.bi.go.id. The type of data used is quantitative data. The research variables are rentability, efficiency, financing risk, FDR, Capital Adequacy Ratio (CAR) and macroeconomic data in the form of GDP and inflation. Rentability is measured by Nett operating margin (NOM), bank efficiency is measured using BOPO and financing risk is measured by non-performing financing (NPF). The analysis technique used is multiple linear regression. The results showed that the GDP variable did not affect rentability. Efficiency, risk, and CAR affect rentability. FDR does not affect rentability</em><em>.</em></p></td></tr></tbody></table>

scholarly journals PENGARUH KINERJA KEUANGAN TERHADAP PEMBIAYAAN BANK UMUM SYARIAH DI INDONESIA (PERIODE 2009-2013)

2016 ◽  
Vol 5 (2) ◽  
Author(s):  
Irma Safitri ◽  
Nadirsyah Nadirsyah ◽  
Darwanis Darwanis
Keyword(s):  
Commercial Banks ◽  
Research Data ◽  
Capital Adequacy ◽  
Third Party ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Independent Variables ◽  
The Third ◽  
Capital Adequacy Ratio ◽  
Observation Period

The purposes of this research were to determine the effect of the financial performance of Islamic commercial banks in Indonesia on financing, both individually and simultaneously. The performance was measured through Third Party Funds (TPF), Capital Adequacy Ratio (CAR), Non-Performing Financing (NPF), and Financing to Deposit Ratio (FDR). These four independent variables to be tested influence on the dependent variable. This research used census method that includes all of the Islamic banks in Indonesia for observational data. Research data observation period from 2009 until 2013 a total of 11 banks. Multiple linear regression was used to analyze the data.The results of this study found that the Third Party Funds (TPF), Capital Adequacy Ratio (CAR), Non Performing Financing (NPF), and Financing to Deposit Ratio (FDR) affect the financing, both individually and simultaneously. Fluctuations in either an increase or decrease of financing that occurred in Islamic banking in Indonesia is determined by the four independent variables. That is to say, the four independent variables that have an important role in the financing of Islamic banking in Indonesia. =========================================== Penelitian ini bertujuan untuk menguji pengaruh kinerja keuangan bank umum syariah di Indonesia terhadap pembiayaan, baik secara parsial maupun simultan. Kinerja keuangan diukur melalui Dana Pihak Ketiga (DPK), Capital Adequacy Ratio (CAR), Non Performing Financing (NPF), dan Financing to Deposit Ratio (FDR) Keempat variabel bebas tersebut akan diuji pengaruhnya terhadap satu variabel tidak bebas. Penelitian ini adalah penelitian sensus, yakni memasukan semua bank umum syariah yang ada di Indonesia ke dalam data pengamatan. Periode pengamatan data penelitian dari tahun 2009 s.d 2013 yang berjumlah 11 perbankan. Metode analisis yang digunakan adalah regresi linear berganda. Hasil penelitian ini menemukan bahwa Dana Pihak Ketiga (DPK), Capital Adequacy Ratio (CAR), Non Performing Financing (NPF), dan Financing to Deposit Ratio (FDR) berpengaruh terhadap pembiayaan pada perbankan syariah di Indonesia, baik secara parsial maupun simultan. Fluktuasi baik itu peningkatan atau penurunan pembiayaan yang terjadi pada perbankan syariah di Indonesia ditentukan oleh keempat variabel bebas tersebut. Sehingga dapat dikatakan bahwa, keempat variabel bebas tersebut mempunyai peranan penting atas pembiayaan pada perbankan syariah di Indonesia.

scholarly journals Analysis of the determinants of bank liquidity risk: The case of Islamic banks in the UAE

2021 ◽  
Vol 119 ◽  
pp. 01008
Author(s):  
Khadija Ichrak Addou ◽  
Afaf Bensghir
Keyword(s):  
Liquidity Risk ◽  
Multiple Linear Regression Model ◽  
Capital Adequacy ◽  
Annual Data ◽  
Islamic Banks ◽  
Mena Region ◽  
Return On Assets ◽  
Return On Equity ◽  
Risk Determinants ◽  
The Impact

This article aims to examine the principal parameters that impact the liquidity risk incurred by Islamic banks in the UAE. The study examines annual data from four Islamic banks in the UAE. The Data is extracted from their annual activity reports and financial results. A multiple linear regression model is used to assess the impact of six bank-specific variables (Return on Equity, return on assets, size of the bank, liquidity gaps, non-performing loans and capital adequacy ratio) on the liquidity risk of UAE Islamic banks. The designed model shows that ROA and NPL negatively impact the liquidity risk of the studied banks, while the other determinants, namely size, ROE, liquidity gaps and CAR contribute to the improvement of liquidity of UAE banks. Thus, our empirical results complement the existing studies related to the analysis of liquidity risk determinants incurred by Islamic banks operating in the MENA region, especially Emirati banks.

scholarly journals Kinerja Keuangan Dan Tingkat Bagi Hasil Deposito Mudharabah Pada Bank Umum Syariah Di Indonesia

2019 ◽  
Vol 4 (1) ◽  
pp. 45-66
Author(s):  
Umiyati Umiyati ◽  
Shella Muthya Syarif
Keyword(s):  
Computer Program ◽  
Profit Sharing ◽  
Capital Adequacy ◽  
Islamic Banks ◽  
Microsoft Excel ◽  
Monthly Data ◽  
Purposive Sampling ◽  
Capital Adequacy Ratio

This research aims to analyze the effect of Return On Asset (ROA), Capital Adequacy Ratio (CAR) and BOPO to the level of profit sharing mudharaba deposits Islamic Banks in Indonesia's period January 2011 – June 2015. The data used in this study are monthly data from January 2011 to June 2015. Technical sampling used in this research is purposive sampling, with a sample of 12 Islamic Banks recorded in data from Bank Indonesia. This study uses a computer program SPSS version 20.0 and Microsoft Excel 2007. The result in this research showed that Return On Asset (ROA) and Capital Adequacy Ratio (CAR) partially have significant effect on the level of profit sharing mudharaba deposits While the partial BOPO haven’t significant effect of the level of profit sharing mudharaba deposits Simultaneously, Return On Asset (ROA), Capital Adequacy Ratio (CAR) and BOPO had significant effect on the level of profit sharing mudharaba deposits The results also show that variable Return On Asset (ROA) the most dominant on the level of profit sharing mudharaba deposits with the value β of -0,273, and a significance value smaller than 0,05 (0,000 < 0, 05).

scholarly journals PENGUATAN STRUKTUR MODAL SEBAGAI PEMENUHAN REGULASI DAN PENDUKUNG PENGEMBANGAN BISNIS

2020 ◽  
Vol 12 (1) ◽  
pp. 43-51
Author(s):  
Tedi Setiawan ◽  
Jaja Suteja ◽  
Ellen Rusliati
Keyword(s):  
Capital Structure ◽  
Research Method ◽  
Banking Industry ◽  
Market Competition ◽  
Descriptive Analysis ◽  
Capital Requirements ◽  
Capital Adequacy ◽  
Effective Strategies ◽  
Capital Adequacy Ratio ◽  
The Impact

Decision on capital structure have an important role in determinig banking performance.This study aims to find alternative strategies for Bank X in fulfilling the capital requirements and to measure its the effectivities in order to reach the capital requirements of the Bank X to be in accordance with the regulations in 2018. The results of this study are expected to provide useful information related to the importance of strengthening the capital structure of the company, especially in the banking industry in order to maintain the continuity of business and to win in the market competition. The study was conducted at Bank X was located in Bandung. The research method used was survey with qualitative research approaches. While the type of research was explorative descriptive analysis. The results of the study was found three effective strategies to meet the capital needs of Bank X in 2018, namely asset revaluation, reduction in dividend payout ratio (DPR) and the issuance of subordinated bonds. These three strategies could improve Capital Adequacy Ratio (CAR). while alternative simulations need to be carried out to determine the impact of the decision making.

scholarly journals Impact of Macroeconomic Factors on Banking Profitabilty

2018 ◽  
Vol 5 (1) ◽  
pp. 44
Author(s):  
Lutfullah Lutf ◽  
Hafizullah Omarkhil
Keyword(s):  
Banking Sector ◽  
Capital Adequacy ◽  
Islamic Banks ◽  
Related Factors ◽  
Comparative Performance ◽  
Macroeconomic Factors ◽  
Macroeconomic Variables ◽  
Interest Income ◽  
Long Run ◽  
The Impact

This study comparatively focuses on the impact of macroeconomic determinants and the internal indicators on bank performance. It comparatively evaluates the differential effects of macroeconomic variables and bank specific variables. Thus, considering five-five banks from each system, a comparative performance investigation between conventional & Islamic banks is the aim of this paper. To determine the short-run and long-run impact of these factors, co-integration & general to specific approach are adopted. This study also considers bank specific and macroeconomic variables in two separate models (Return on Assets and Return on Equity). Our objective is to find whether or not Islamic banks are performing well in the country as compared to their conventional counterparts. The results indicate that in the long run, Gross Domestic Product, and inflation, is positively related to performance, while Interest rate has no effect on the performance of banking sector in Pakistan. Similarly, bank size, capital adequacy, expenses, interest income and non-interest income are the bank related factors that significantly influence the performance of financial sector.

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