scholarly journals THE IMPACT OF INTERNAL VARIABLES ON THE ISLAMIC BANKS AND CONVENTIONAL BANKS FINANCIAL PERFORMANCE IN JORDAN: A COMPARATIVE STUDY

2020 ◽  
Vol 10 (6) ◽  
pp. 222-231
Author(s):  
Khawla K. Abdo
Keyword(s):  
Comparative Study ◽  
Financial Performance ◽  
Internal Variables ◽  
Islamic Banks ◽  
Conventional Banks ◽  
The Impact

Does the country’s religion affect the financial performance of conventional and Islamic banks? Comparative study in the international framework

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Achraf Haddad ◽  
Achraf Haddad
Keyword(s):  
Financial Performance ◽  
Generalized Method Of Moments ◽  
Developed Countries ◽  
Emerging Countries ◽  
Islamic Banks ◽  
Governance Mechanism ◽  
Content Type ◽  
Conventional Banks ◽  
The Impact ◽  
Conventional And Islamic Banks

Purpose The purpose of this study is to compare the impact of religion on the financial performance of conventional and Islamic banks in the framework of stakeholders’ theory. Design/methodology/approach Few studies have focused on studying the impact of religion on banking performance. Although religion represents an external governance mechanism for financial institutions, by using the generalized method of moments (GMM), this topic constitutes a research opportunity. The already modeled variables are collected from 76 countries located on 5 continents. The data were collected from DATASTREAM, banks’ annual reports, WIKIPEDIA and World Bank. It concerns 210 banks of each type during the period (2010–2020). Findings The author retained that religion negatively affects the financial performance of both conventional and Islamic banks. More specifically, results showed that religion affected the liquidity and solvency of two bank types. It also affected conventional banks’ profitability and efficiency of conventional banks. Research limitations/implications I summarized the theoretical contribution in the integration of a new original governance category to enhance its presence with impacts directly affecting the banks’ financial performance. Empirically, the study can be seen as a compass for all stakeholders to consider environmental, behavioral and doctrinal factors in studying the financial performance evolution and to become more competitive in the banking market. Originality/value Although conventional banks located in developed countries are different from those existing in emerging countries and Islamic banks located in developed countries are different from those existing in emerging countries, I carried out a diversified study in the global context. Referring to the comparative literature review between conventional and Islamic banks, the study was the first conditional research that compared the impacts of religion on the financial performance of conventional and Islamic banks.

scholarly journals A Comparative Study of Islamic and Conventional Banking in Bangladesh: Camel Analysis

2016 ◽  
Vol 10 (1) ◽  
pp. 73-91 ◽  
Author(s):  
Md Tanim Ul Islam ◽  
Mohammad Ashrafuzzaman
Keyword(s):  
Comparative Study ◽  
Financial Performance ◽  
Financial Statements ◽  
T Test ◽  
Capital Adequacy ◽  
Islamic Banks ◽  
Management Capability ◽  
Significant Difference ◽  
Conventional Banks

The aims of this study are to evaluate the financial performance of Islamic and conventional banks of Bangladesh through CAMEL test during the period of 2009 to 2013. The study tries and to determine whether there are significant differences between the two categories of banks for each of the ratios used in CAMEL test. A sample of five listed conventional banks and five listed Islamic banks were selected to study the objectives. The data used in this study were compiled from the financial statements of the respective sample banks. To make substantial noteworthy results, t-test(independent sample) is used. This paper found no significant difference between the Islamic banks and conventional banks regarding capital adequacy, management capability and earnings but found a significant difference regarding asset quality.Journal of Business and Technology (Dhaka) Vol.10(1) 2015; 73-91

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 The Impact of Financial Performance on Corporate Social Responsibility: An Empirical Analysis of Conventional and Islamic Banks of Pakistan

2018 ◽  
Vol 2 (2) ◽  
pp. 01-18
Author(s):  
Ummara Fatima ◽  
Uzma Bashir
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Financial Performance ◽  
Banking Sector ◽  
Annual Reports ◽  
Islamic Banks ◽  
Conventional Banks ◽  
Corporate Social ◽  
The Impact ◽  
The Relationship

The study explores how financial performance (FP) affects the corporate social responsibility (CSR) of the banking sector of Pakistan. Further, it also elaborates the comparison between FP and CSR of Islamic and conventional banks of Pakistan. The study is based on the annual reports of banks listed at Pakistan Stock Exchange (PSE) for the years 2010-2016. The study used several panel data diagnostic tests and three regression models to check the relationship between FP and CSR of Islamic and conventional banks of Pakistan, while taking leverage and size as control variables. The results indicate that in case of conventional banks the relationship between ROE and CSR is negative. Here, the results are consistent with the agency theory which states that investment in CSR related activities is a waste of resources. While return on asset (ROA) is depicting negative and insignificant relationship with CSR, which depicts that FP does not have any impact on the investment in CSR initiatives. In the case of Islamic banks, the relationship between return on equity (ROE) and CSR is positive and significant. Here, the results support social contract and stakeholder theories. The research has important practical consequences that will help the banking industry managers to adopt optimal investment strategies about CSR related activities. The study provides guidelines to conventional banks to invest more in CSR in the same way Islamic banks are doing. The findings of the study lay some foundations upon which a more detailed analysis of CSR of banks could be based.

scholarly journals Impacts of ownership structure on the financial performance of conventional and Islamic banks in the agency theory context

2020 ◽  
Vol 17 (3) ◽  
pp. 46-70 ◽  
Author(s):  
Achraf Haddad ◽  
Anis El Ammari ◽  
Abdelfettah Bouri
Keyword(s):  
Financial Performance ◽  
Agency Theory ◽  
Ownership Structure ◽  
Chief Executive ◽  
Islamic Banks ◽  
Differential Analysis ◽  
Two Samples ◽  
Conventional Banks ◽  
The Impact ◽  
Conventional And Islamic Banks

According to the literature review, the analysis results of the impact of ownership structure quality on financial performance within conventional and Islamic financial institutions are contradictory. In our study, we performed a fine differential analysis aimed at resolving this ambiguity. The financial performance and ownership structure variables of conventional and Islamic banks were collected from 16 countries located in three continents: Europe, Asia, and Africa. Two samples were collected that each of them is composed of 63 banks. By using the OLS method, these panel data were compared to the impact of ownership structure on the financial performance between both types of banks in the agency theory framework during the period 2010-2018, giving us 567 bank-year observations in each sub-sample. Results revealed that the ownership structure of conventional banks has had an explained ambiguous impact on its financial performance, whereas that of Islamic banks has a positive effect. Overall, the impacts of the Chief Executive Officer (CEO) shareholding and the board’s chairman shareholding are more significant on the financial performance of conventional banks than those of impacts related to Islamic banks.

scholarly journals Effect of board quality on the financial performance of conventional and Islamic banks in a stable financial context: Comparative study on the international evidence

2020 ◽  
Author(s):  
Achraf HADDAD ◽  
Anis EL AMMARI ◽  
Abdelfattah BOURI
Keyword(s):  
Financial Performance ◽  
Board Of Directors ◽  
Positive Impact ◽  
Main Role ◽  
Islamic Banks ◽  
The Board Of Directors ◽  
Internal Mechanism ◽  
Conventional Banks ◽  
The Impact ◽  
Conventional And Islamic Banks

Abstract Returning to the literature of finance and banking governance, our article provides the first logical analysis that detailed the process of comparative analysis between the correlation of board determinants’ quality and the financial performance of conventional and Islamic banks. Previous research has always discussed the main role of the board as an internal mechanism of governance on the financial performance separately in each bank type. However, we have never encountered rewarding studies that compared these impacts. In our study, we distinguished between the impact of the board of directors on the financial performance in conventional and Islamic banks. Settings of the financial performance and board of directors of the conventional and Islamic banks are collected from 30 countries located in four continents: America, Europe, Asia, and Africa. Two equal samples were collected that each of them is composed of 112 banks. By using the GLS method, data were used to explore the impact of the board of directors on the financial performance between both types of banks over the period 2010-2018, giving us 1008 bank-year observations in each sub-sample. On the whole, empirical results have shown that in conventional banks the board of directors has negatively affected the financial performance, while the impact of the board on the financial performance of Islamic banks is ambiguous. Nevertheless, the degree of the positive impact on financial performance is more significant in Islamic banks.

scholarly journals Financial performance of conventional and Islamic banks in Bahrain: a comparative study

2019 ◽  
Vol 14 (4) ◽  
pp. 192-205 ◽  
Author(s):  
Sayel Ramadhan ◽  
Mohammad Selim ◽  
Ahmad Sahwan
Keyword(s):  
Comparative Study ◽  
Financial Performance ◽  
Islamic Banks ◽  
Return On Equity ◽  
Financial Ratio ◽  
Financial Ratio Analysis ◽  
Risk Cost ◽  
Conventional Banks ◽  
Asset Size ◽  
The Relationship

The main purpose of this study is to identify the variables that influence the financial performance of both types of banks, Islamic and conventional, and compare their financial performance over the period of 2003–2016. Banks listed on the Bahrain Bourse as of December 31, 2016 were used in the study, with a total of seven banks, of which three are Islamic and four are conventional. To make an appropriate comparative study, financial ratio analysis is used. Multiple regression and paired sample t-test are used to analyze the data. Return on assets (ROA) and return on equity (ROE) are considered as the basis for measuring financial performance and are set as dependent variables. The analysis of the results shows that conventional banks perform better than Islamic banks in terms of profitability. The results also show that ROA is significantly related to risk, cost of intermediation and efficiency ratios, while ROE is highly influenced by risk ratios only. Moreover, it was found out that the relationship between asset size and the performance of banks is insignificant, while the relationship between the number of branches and both ROA and ROE is significant.

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