scholarly journals Comparison of factors influencing liquidity of European Islamic and conventional banks

2021 ◽  
Vol 12 (2) ◽  
pp. 375-398
Author(s):  
Hussam Musa ◽  
Zdenka Musova ◽  
Viacheslav Natorin ◽  
George Lazaroiu ◽  
Martin Martin Boda
Keyword(s):  
Risk Sharing ◽  
Value Added ◽  
Capital Adequacy ◽  
Islamic Banks ◽  
Credit Expansion ◽  
Factors Influencing ◽  
Net Interest Margin ◽  
Conventional Banks ◽  
The Impact ◽  
Interest Margin

Research background: The innovation in Shar??ah-compliant banking products has resulted in the rapidly increasing size of assets in Islamic banks worldwide. The assets of such banks have been growing twice as fast as those of conventional banks. Islamic banks do not depend on conventional interest, speculation, or complex derivatives stemming from banking operations. Instead, their actions in respect of profit/risk sharing, and the clarity of the contract are consistent with Islamic Shar??ah principles, which seek to promote a more equal society. Purpose of the article: This research aims to identify and compare factors influencing the liquidity of Islamic and conventional banks in Europe. Candidate factors are sought amongst profitability, credit quality, credit expansion and capital adequacy indicators. Methodology: First, relevant financial ratios for 249 observations on Islamic banks and 2,306 observations on conventional banks are selected and compared for the period 2013?2017. Second, liquidity is explained separately for each type of banks by panel data regression to identify its determinants in a comparative context. Findings & value added: The results indicate that the impact of the net interest margin on the liquidity ratio of Islamic banks is insignificant, which is obviously due to the prohibition of the use of interest (riba). To the contrary, in conventional banking a higher net interest margin results in a reduction in liquidity. Capital adequacy has a positive influence upon liquidity in both types of banks, but in Islamic banking, the influence is 5.4 times greater. The findings strongly suggest that the liquidity of Islamic and conventional banks is affected by different factors.

scholarly journals KOMPARASI KINERJA DAN KETAHANAN KREDIT ANTARA PERBANKAN KONVENSIONAL DAN PERBANKAN SYARIAH

Media Ekonomi ◽  
2015 ◽  
Vol 23 (1) ◽  
pp. 55
Author(s):  
Frisky Elisa ◽  
Ida Busneti
Keyword(s):  
Exchange Rate ◽  
Capital Adequacy ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Factors Affecting ◽  
Net Interest Margin ◽  
Capital Adequacy Ratio ◽  
Conventional Banks ◽  
Interest Margin

<em>This research aims to know the factors affecting the performance and credit resilience at cinvensional and Islamic banks. In addition to comparing the performance and credit resilience of the convensional and Islamic banks. Using Pooled methods.  This research uses the return on asset (ROA) for performance bankings are measure non-performing loan (NPL) / non-performing finance (NPF) to credit resilience. Factor that are used to looking at banking performance, among others, the lain net interest margin (NIM), non-performing loan (NPL) atau non-performing finance (NPF), Loan to deposit ratio (LDR), dan BOPO. While credit resilience, fators that are used among others inflation, exchange rate, Loan to deposit ratio (LDR) dan capital adequacy ratio (CAR). This research uses a conventional five banks and five Islamic banks from 2010 quarter 01 – 2013 quarter 02. The data used in this study were obtained from quarterly report of the bank for 2010-2013. Badan Pusat Statistik and Bank Indonesia. Result of analysis of this study that the performance of conventional banks is influential NPL and BOPO while in credit resilience is inflation, in a ratio impact on Islamic banking performance as BOPO and influencing credit resilience is CAR</em>

scholarly journals The impact of oil price crisis on financial performance of commercial banks in Bahrain

2017 ◽  
Vol 12 (4) ◽  
pp. 4-16
Author(s):  
Iqbal Thonse Hawaldar ◽  
Babitha Rohit ◽  
Prakash Pinto ◽  
Rajesha T. M.
Keyword(s):  
Commercial Banks ◽  
Capital Adequacy ◽  
Oil Price ◽  
Islamic Banks ◽  
Crisis Period ◽  
Significant Difference ◽  
Oil Export ◽  
Oil Crisis ◽  
Conventional Banks ◽  
The Impact

Oil export is the major source of revenue for the countries in the Middle East. Their economies are sensitive to fluctuations in oil prices. The present study examines the impact of oil crisis on the performance of selected banks of Kingdom of Bahrain using profitability, efficiency, capital adequacy and liquidity ratios in the pre-crisis and crisis periods. The study reveals that there is no significant difference in the performance of banks in the pre-crisis and crisis period. The results indicate that there is a significant difference in the performance of conventional banks and Islamic banks in the pre-crisis period. However, there is no significant difference in the performance of conventional banks and Islamic banks during the crisis period.

scholarly journals Analisis Faktor Spesifik Bank Terhadap Non Performing Loan Pada Bank Umum Konvensional Yang Terdaftar Di Bursa Efek Indonesia

Owner ◽  
2022 ◽  
Vol 6 (1) ◽  
pp. 43-55
Author(s):  
Meily Juliani
Keyword(s):  
Secondary Data ◽  
Capital Adequacy ◽  
Annual Reports ◽  
Return On Equity ◽  
Operating Income ◽  
Net Interest Margin ◽  
Capital Adequacy Ratio ◽  
Specific Factors ◽  
Conventional Banks ◽  
Interest Margin

The purpose of this research is to analyze the effect of bank specific factors on non-performing loan on public conventional banks. The dependent variable studied was the non-performing loan and independent variables examined were capital adequacy ratio, bank size, loan to deposit ratio, net interest margin, return on equity, operating expenses to operating income, and earning per share.  The secondary data obtained from the annual reports submitted in the IDX. Sample consist of 32 public conventional banks listed in IDX in the period of 2012-2017. The result of this study indicate that bank size and net interest margin has a positive and significant impact on non-performing loan. While return on equity showed a negative and significant impact on non-performing loan. The result of this study also showed that capital adequacy ratio, loan to deposit ratio, operating expenses to operating income and earning per share did not have any significant impact on non-performing loan.

scholarly journals DAMPAK FAKTOR INTERNAL DAN EKSTERNAL TERHADAP PROFITABILITAS PERBANKAN (Studi pada Bank Konvensional di Indonesia Periode Januari 2012 - Januari 2019)

2019 ◽  
Vol 11 (03) ◽  
pp. 121-137
Author(s):  
Silvia Hendrayanti ◽  
Wachidah Fauziyanti ◽  
Eni Puji Estuti
Keyword(s):  
Firm Size ◽  
Capital Adequacy ◽  
Operating Costs ◽  
Return On Assets ◽  
Operating Income ◽  
The Public ◽  
Net Interest Margin ◽  
Capital Adequacy Ratio ◽  
Conventional Banks ◽  
Interest Margin

The bank is one of the financial institutions which has the activity of collecting funds from the public in the form of deposits and channeling them to the public in the form of credit or other forms in order to improve the lives of many people. The purpose of the banking business is to make a profit. Banking profitability is one of the most important indicators in determining the success of a bank and can be used as a basis for banking policies and strategies in the coming period. The purpose of this study was to examine the effect of Operating Costs on Operating Income (BOPO), Capital Adequacy Ratio (CAR), Net Interest Margin (NIM), Loan to Deposit Ratio (LDR), Firm size, and inflation on Return on Assets (ROA). The population in this study is the Conventional Banks in Indonesia in the period January 2012-January 2019. The sample selection using the purposive sampling method with the criteria for the monthly financial statements of all conventional banks in Indonesia during the observation period January 2012-January 2019 has been published by Bank Indonesia. The number of samples used in this study were 85 samples. In this study the research methods used descriptive analysis, Classical Assumptions (Normality, nonautocorrelation, Multicollinearity, Heteroscedasticity), multiple regression model analysis, hypothesis testing (z-statistic test, F-statistic test, and coefficient of determination (R2) test). The results of this study found that Operating Costs to Operating Income (BOPO) had a negative and significant effect on Return On Assets (ROA), Capital Adequacy Ratio (CAR) and Net Interest Margin (NIM) had a negative and significant effect on Return on Assets (ROA) ), Loan to Deposit Ratio (LDR) has a positive but not significant effect on Return On Assets (ROA), Firm size and inflation have a negative and significant regression coefficient on Return On Assets (ROA).

Intellectual capital efficiency and bank’s performance

2019 ◽  
Vol 31 (4) ◽  
pp. 672-694 ◽  
Author(s):  
Amina Buallay ◽  
Richard Cummings ◽  
Allam Hamdan
Keyword(s):  
Financial Performance ◽  
Intellectual Capital ◽  
Positive Relationship ◽  
Market Performance ◽  
Value Added ◽  
High Tech ◽  
Islamic Banks ◽  
Content Type ◽  
Conventional Banks ◽  
The Impact

Purpose Intellectual capital (IC) plays a pivotal role in the high-tech and knowledge-based economic sectors. With the emergence of FinTech, which, with respect to the banking sector, is merging high-tech with the k-economy, there is an emerging need to highlight the importance and understand the dynamics of bank IC. With respect to Gulf Cooperation Council (GCC) economies, where FinTech has become de rigueur, banking is bifurcated into Islamic and banking sectors. Through comparative empirical analysis, the purpose of this paper is to examine IC efficiency in Islamic and conventional banks with a view to elucidating the impact of IC, in aggregate and decomposed into its components, on an operational, financial and market performance of Islamic banks juxtaposed with conventional banks. Design/methodology/approach Using data collected from 59 banks for five years (2012-2016) involving 295 observations, an independent variable derived from the modified value added IC (MVAIC) components are regressed against dependent bank performance indicator variables [Return on Assets (ROA), Return on Equity (ROE) and Tobin’s Q (TQ)]. Two types of control variables complete the regression analysis in this study: bank-specific and macroeconomic. Findings The findings elicited from the empirical results demonstrate that there is positive relationship between IC efficiency and financial performance (ROE) and market performance (TQ) in Islamic banks. In conventional banks, however, there is a positive relationship between IC and operational performance (ROE) and financial performance (ROE). Originality/value The model in this paper presents a valuable analytical framework for exploring IC efficiency as a driver of performance in dual-sector banking economies characterized by co-existence of Islamic and conventional financial institutions. In addition, this paper highlights bank management lacunae manifesting in terms of the weak nexus between: IC and asset efficiency (ROA) in Islamic banks and IC and market value (TQ) in conventional banks.

scholarly journals Islamic Commercial Banking In Europe: A Cross-Country And Inter-Bank Analysis Of Efficiency Performance

2012 ◽  
Vol 11 (6) ◽  
pp. 647 ◽  
Author(s):  
Ahmad M. Abu-Alkheil ◽  
Hans-Peter Burghof ◽  
Walayet A. Khan
Keyword(s):  
Correlation Coefficients ◽  
Commercial Banking ◽  
Capital Adequacy ◽  
Western World ◽  
Islamic Banks ◽  
Efficiency Performance ◽  
Dea Efficiency ◽  
Conventional Banks ◽  
The Uk ◽  
The Impact

We examine the relative efficiency performance of the Islamic Bank of Britain (IBB), the first stand-alone full-fledged Islamic commercial bank in the Western world, against conventional banks in the UK, and also against Islamic banks from Muslim-majority countries. We also apply a two-stage Data Envelopment Analysis (DEA) model to determine the impact of internal and external factors on bank's efficiency. In order to investigate the association of the DEA-efficiency scores with the traditional accounting ratios, we estimate the correlation coefficients between the two variables. The efficiency-profitability matrix is used to enable the characterization of the banks' performance profile. Our analysis covers the period from 2005 to 2008. Our results show that the IBB is technically inefficient. It also has relatively a poor financial performance. The banks inefficiency stems from both scale (size) and management issues. IBB exhibits, however, an upward trend in efficiency and profitability, particularly in adverse market conditions. Thus, it has a great prospect to increase efficiency and strong potential for further growth in the UK. Additionally, results suggest that the technically more efficient banks are larger, have greater profitability and loans intensity, acquire less debt, and on average have a lower market share. IBB is relatively superior in terms of lending intensity and capital adequacy. Findings further illustrate that the DEA measures can be used separately or concurrently with standard accounting measures in determining Islamic banks performance.

Factors Influencing the Margins of Islamic Banks

2018 ◽  
Vol 19 (4) ◽  
pp. 1026-1036
Author(s):  
Nurhafiza Abdul Kader Malim ◽  
M.K. Normalini
Keyword(s):  
Global Financial Crisis ◽  
Positive Impact ◽  
Liquidity Risk ◽  
Institutional Development ◽  
Capital Adequacy ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Factors Influencing ◽  
Conventional Banks ◽  
The Global Financial Crisis

This article investigates the factors influencing the margins of Islamic banks in 15 countries for the period 2007–2013. The article also analyses the effect of the global financial crisis (2007–2009) on the Islamic banks’ margins. Despite the rapid growth of Islamic banking, the margins of Islamic banks remain higher than conventional banks. The margins reflect the costs of financial intermediation, as higher margins may discourage clients from using bank services. The findings reveal that the margins of Islamic banks are affected mainly by capital adequacy, overhead costs, liquidity risk, bank size and institutional development. Interestingly, the crisis has a positive impact on Islamic banks’ margins. These findings will be useful for the design of policies in narrowing the margins.

scholarly journals The Impact of Capital on Bank Profitability: Case of Tunisia

2021 ◽  
pp. 7-20
Author(s):  
Mohamed Aymen Ben Moussa ◽  
Hédi Trabelsi ◽  
Adel Boubaker
Keyword(s):  
Capital Adequacy ◽  
Bank Capital ◽  
Return On Assets ◽  
Bank Profitability ◽  
Return On Equity ◽  
Net Interest Margin ◽  
Capital Adequacy Ratio ◽  
The Impact ◽  
The Relationship ◽  
Interest Margin

The capital adequacy ratio measures the ability of a financial institutions to meet its liabilities by comparing its capital with assets. This article studied the relationship between bank capital and bank profitability measured by (Return on assets; return on equity; net interest margin). We used a method of static panel for a sample of 11 banks in Tunisia between (2000…2018). We found that bank capital has a significant impact on ROA. But capital has a non significant effect on bank return on equity and not significant impact on bank net interest margin.

scholarly journals The effect of liquidity risk on bank performance: A comparative study of Islamic and conventional banks in the middle east and north Africa region

Accounting ◽  
2021 ◽  
pp. 1211-1220 ◽  
Author(s):  
Tijani Amara ◽  
Tharwa Najar
Keyword(s):  
Middle East ◽  
Comparative Study ◽  
North Africa ◽  
Generalized Method Of Moments ◽  
Liquidity Risk ◽  
Capital Adequacy ◽  
Bank Performance ◽  
Islamic Banks ◽  
Conventional Banks ◽  
The Impact

This study explores the impact of liquidity risk on Bank performance through a comparative study between conventional and Islamic banks in the Middle East and North Africa Region (MENA). Bank Size, Capital adequacy ratio, liquidity Gap and Return on Assets are used as independent variables and the Bank Age, Inflation Rate and Growth Rate of Domestic product are used as macro-economic variables and the dependent variable is liquidity risk. The methodological choice is the generalized method of moments (GMM). We used a sample of 10 Islamic banks and 25 conventional banks in the MENA region during the period of 2006-2018. The results show various impacts of these variables on liquidity risk in both banks. We also find that the rise in CAR in Islamic banks and conventional banks does not influence liquidity risk. The logical explanations are that the bank could allocate funds to improve credit and fixed assets.

scholarly journals Analysis of Capital Adequacy Ratio, Operational Costs of Operational Income, Net Interest Margin, and Non Performing Loan Towards Loan to Deposit Ratio in Go Public Conventional Banks, 2012 – 2017 Periods

2019 ◽  
pp. 56-60
Author(s):  
Mochamad Soelton ◽  
Tri Wahyono ◽  
Ogie Trydianto MN ◽  
Dian Faqihdien Suzabar ◽  
Taufik Akbar ◽  
...  
Keyword(s):  
Stock Exchange ◽  
Sampling Technique ◽  
Capital Adequacy ◽  
Independent Variables ◽  
Operational Costs ◽  
Net Interest Margin ◽  
Capital Adequacy Ratio ◽  
Conventional Banks ◽  
Conventional Bank ◽  
Interest Margin

This research aims to identify and analyze the effect of Capital Adequacy Ratio (CAR), Operation Expense (BOPO), Net Interest Margin (NIM), and Non Performing Loan (NPL) of the Loan to Deposit Ratio (LDR) of conventional bank on the Indonesia Stock Exchange period 2012 – 2017, either simultaneously or partially. Independent variables used in this study is CAR, BOPO, NIM and NPL, while LDR as the dependent variable.The population in this research is conventional bank listed on the Indonesia Stock Exchange. The sampling technique in this research is purposive sampling. The number of samples in accordance with the prescribed criteria are as many as 35 samples. Based on the result of the research found that the variable CAR influences negatively insignificantly toward LDR, BOPO and NIM influences positively insignificantly toward LDR, while the variable NPL influences positively significantly toward CAR. But simultaneously CAR, BOPO, NIM, and NPL jointly affect the LDR.

Sign in / Sign up

Export Citation Format

Share Document