Nexus between Liquidity Risk and Islamic Banking Performance

rahatulquloob ◽  
2019 ◽  
pp. 63-70
Author(s):  
Nadeem Iqbal ◽  
Dr. Arshad Muneer Laghari ◽  
M. Mohsin
Keyword(s):  
Risk Management ◽  
Regression Analysis ◽  
Random Sampling ◽  
Banking Sector ◽  
Liquidity Risk ◽  
Simple Random Sampling ◽  
Bank Performance ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Management Tools

The study aims to assess liquidity risk of Islamic banking sector with Islamic banks performance working under Sharia jurisdictions. To deduct this six Islamic banks are selected of Pakistan by deploying regression analysis on panel data. Simple random sampling is used to select these banks to assess liquidity risk management tools of study. For performance profitability index is used generated by ROA, ROE and EPS. Thus the results inferred that liquidity risk proponents have significant role on bank performance and there is dire need to focus risk management compliance practices and regulations by these banks to reduce banks financial disparity. The value of study is in itself that has less focused in previous studies revealing its originality.  

scholarly journals Pengaruh Islamic Corporate Governance dan Islamic Social Reporting terhadap Kinerja Keuangan Bank Syariah di Indonesia

2021 ◽  
Vol 1 (1) ◽  
pp. 11-20
Author(s):  
Ibnu Trilaksono ◽  
◽  
Agrianti Komalasari ◽  
Chara Pratami Tidespania Tubarad ◽  
Yuliansyah Yuliansyah ◽  
...  
Keyword(s):  
Corporate Governance ◽  
Financial Performance ◽  
Commercial Bank ◽  
Banking Sector ◽  
Stock Exchange ◽  
Social Reporting ◽  
Bank Performance ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Exchange Contribution

Abstract Purpose: This study examined the effect of Islamic Corporate Governance and Islamic Social Reporting on the Financial Performance of Islamic Banks in Indonesia at Sharia Commercial Bank Companies Listed on the Indonesia Stock Exchange. Research methodology: This study used multiple regression as the method to analyze the result of the research. By using 14 shariah banking data, this research will analyze the performance of the Indonesian general bank. Result: This study indicates that the variables that affect Islamic bank performance in this research are not implemented effectively. Limitations: The sample of this study was only 14 Islamic commercial banks and only used the Islamic banking sector in Indonesia, which is listed on the Indonesia stock exchange. Contribution: This research is helpful for further research. One of the guidelines in choosing which variabels to use and which one to use in the study should be understood in selecting Islamic financial performance.

scholarly journals Effect of Non-Performing Investment on Islamic Banks performance: An empirical study on Islamic Banks in Bangladesh.

2019 ◽  
Vol 3 (1) ◽  
pp. 1
Author(s):  
Shafir Zaman ◽  
Md Mohiuddin Chowdhury
Keyword(s):  
Regression Analysis ◽  
Banking Sector ◽  
Statistical Tests ◽  
Capital Adequacy ◽  
Bank Performance ◽  
Islamic Banks ◽  
Correlation And Regression Analysis ◽  
Capital Adequacy Ratio ◽  
The Subject ◽  
Overall Performance

  Non-performing investment are the amounts that can not be collected by organization from clients. In Bangladesh banking sector is facing severe consequences from lack of collection of non- performing loan(non performing investment for Islamic banks).Emphasizing the significance of the subject the study is undertaken  to find out how non performing investment  effect performance of Islamic banks in Bangladesh  for five year period from 2012 to 2016.Statistical tests such as (descriptive statistics, correlation and regression analysis) are performed to find out  the effect non performing investment  have on the overall performance of Islamic banks. Correlation analysis opine negative association of non performing investment with bank performance, bank size  and capital adequacy ratio. On the other hand, regression analysis did not found any significant effect  of non performing investment with bank performance.

Risk management tools practiced in Islamic banks: evidence in MENA region

2014 ◽  
Vol 5 (1) ◽  
pp. 77-97 ◽  
Author(s):  
Rim Ben Selma Mokni ◽  
Abdelghani Echchabi ◽  
Dhekra Azouzi ◽  
Houssem Rachdi
Keyword(s):  
Risk Management ◽  
Design Methodology ◽  
Liquidity Risk ◽  
Public Disclosure ◽  
Islamic Banks ◽  
Mena Region ◽  
Management Tools ◽  
Content Type ◽  
Self Administered Questionnaire ◽  
Practical Implications

Purpose – The main purpose of this study is to investigate in detail the way each risk is being measured and managed by Islamic banks in the MENA region. Design/methodology/approach – This research attempts to examine the perceptions of Islamic bankers about the importance of transparency and public disclosure in the understanding of the bank's risk profile. It covers 23 Islamic banks located in the MENA region using self-administered questionnaire. Findings – The results show that there are differences in the level of risk perception across funding modes. Also Islamic banks use extensively the traditional tools in mitigating risk. Practical implications – The paper discusses and analyses the current practices employed in the risk management of Islamic banks. It identifies the tools and methods used in managing credit risk, market risk, liquidity risk and operational risk by Islamic banks. Originality/value – This study aims to extend the existing literature in two ways. First, this paper contributes to the dearth of studies on examination of tools practiced in the risk management by Islamic banks located in the MENA region. Next, this work integrates the methods used in the management of liquidity risk that have not been studied earlier.

scholarly journals Develop and Engage Talents: A Preliminary Study at Islamic Banks in Northern Region of Malaysia

2017 ◽  
Vol 3 (2) ◽  
pp. 113-122
Author(s):  
Bidayatul Akmal Mustafa Kamil ◽  
Fatin Izzati Iqbal
Keyword(s):  
Succession Planning ◽  
Banking Sector ◽  
Descriptive Analysis ◽  
Simple Random Sampling ◽  
Talent Management ◽  
Northern Region ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Preliminary Study ◽  
The Right

Purpose: Attract, select, develop and engage the right talents at the right time, place and position become essential for upgrading the management system in the banking sector. This study identifies the development of talents through talent management and succession planning, which may engage those employees with the banks. Design/Methodology/Approach: In this preliminary study, 180 copies of questionnaires were distributed to the bankers who are currently working with some Islamic Banks in the Northern region of Malaysia; Kedah, Perlis and Pulau Pinang. The simple random sampling techniques applied. The analysis of this study are all descriptive. Findings: This study explores the descriptive analysis on talent management, succession planning and talent engagement, that might be particularly focus on the mean of each variables. The analyses show that, the respondents believed that talent management and succession planning, as well as talent engagement should well-known exist and outstandingly being implemented in Islamic banking industry. Implications/Originality/Value: Islamic banks demand for talents of bankers that are not only well profound with Sharia knowledge but also capable to ascertain the differences between Islamic banking and finance regulation at par with conventional practices. The analyses of the data are expected to give practical contribution to the Islamic banks to have a better talent management mechanism and succession planning program for engaging their talents in the future.

State ownership and bank performance: conventional vs Islamic banks

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Turki Alshammari
Keyword(s):  
Banking Sector ◽  
Banking System ◽  
Positive Influence ◽  
State Ownership ◽  
Bank Performance ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Content Type ◽  
Banking Systems ◽  
The Impact

Purpose This paper aims to examine the effect of state ownership on bank performance for all banks in the Gulf Cooperation Council (GCC) countries during the period 2003 – 2018, for two distinct banking systems: the conventional and the Islamic banking systems. Design/methodology/approach To achieve the goal of the study, this paper uses a mean t-test to examine the mean difference of the related variables for both banking systems, and a regression test (using the GMM method) to explore the effect of state ownership on bank performance. Findings The most important result of the analysis is that state ownership has a significantly positive influence on bank performance for conventional banks but not for Islamic banks, in the GCC area. Originality/value This study adds to the scarce related literature comparative empirical results with respect to the impact of ownership on the performance of two different banking systems: the conventional system and the Islamic banking system in the GCC area. This study is likely to have implications for policymakers in terms of developing rules relevant to the governance of GCC’s two banking systems that can help to support the stability of the whole banking sector.

scholarly journals Financial Performance of Banks in Lebanon: Conventional vs Islamic

2019 ◽  
Vol 12 (2) ◽  
pp. 40 ◽  
Author(s):  
Boutheina HASHEM ◽  
Hiyam SUJUD
Keyword(s):  
Regression Analysis ◽  
Financial Performance ◽  
Banking Industry ◽  
Bank Performance ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Return On Assets ◽  
Return On Equity ◽  
The Difference ◽  
Conventional Banks

This study compares the performance of Islamic and conventional banking in Lebanon in terms of Return on Assets and Return on Equity over the period 2012-2016. Moreover, it examines whether the internal characteristics of the bank may explain the difference in profitability between two types of banking transactions. In addition, the results of the study are analyzed using a regression analysis applied to a sample of both Islamic and conventional banks to investigate the effects of these variables on bank performance. Furthermore, results show that Islamic banks in Lebanon have better asset adequacy compared to conventional banks. However, conventional banks are better in liquidity and are on an average more profitable than Islamic ones. It is worthy to indicate that the Islamic banking industry in Lebanon is still in its infancy and only very few of the banks were active in this sector.

scholarly journals ISLAMIC BANKING AND BANK PERFORMANCE IN MALAYSIA: AN EMPIRICAL ANALYSIS

2020 ◽  
Vol 6 (3) ◽  
Author(s):  
Mansor Ibrahim
Keyword(s):  
Instrumental Variable ◽  
Banking Sector ◽  
Spillover Effects ◽  
Bank Performance ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Bank Profitability ◽  
Conventional Banks ◽  
Time Invariant ◽  
Modelling Approach

This paper examines the performance of Malaysia’s banking sector and its relationship to the presence of Islamic banking in the country. More specifically, by controlling for the theoretically relevant determinants of bank performance we compare the efficiency, profitability and risk of Islamic banks to conventional banks and examine the spillover effects of Islamic banking penetration on bank performance. To these ends, we adopt a panel modelling approach. Taking note that our focal variables comprise the time-invariant Islamic banking dummy and potentially endogenous Islamic banking share, we apply the Hausman–Taylor (HT) instrumental-variable estimator in the analysis. Our results indicate that Islamic banks in Malaysia are less profitable than their conventional counterparts and that Islamic banking penetration is associated with lower bank profitability. However, the increasing presence of Islamic banking appears to make Malaysian banks less risky and, with limited evidence, more efficient. Finally, the efficiency–risk trade-off seems to have potential as the Islamic banking portion of the sector increases in size. These results are reasonably robust compared to alternative specifications of the model.  

scholarly journals EMERGENCE OF FINANCIAL TECHNOLOGY IN ISLAMIC BANKING INDUSTRY AND ITS INFLUENCE ON BANK PERFORMANCE IN COVID-19 SCENARIO: A CASE OF DEVELOPING ECONOMY

2021 ◽  
Vol 37 (01) ◽  
pp. 97-109
Author(s):  
Ashfaq Ahmad ◽  
Aamir Sohail ◽  
Abid Hussain
Keyword(s):  
Cyber Security ◽  
Banking Sector ◽  
Banking Industry ◽  
Essential Element ◽  
Bank Performance ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Structured Interviews ◽  
Finance Industry ◽  
Financial Technology

Technological intervention and financial innovation are an essential element for the banking sector especially in post-Covid 19 scenario. Islamic banking industry has also no exception and Islamic banks could attain institutional objectives over financial technology. The motivation behind research is to investigate emergence of financial technology in Islamic Banking Industry and its Influence on Bank Performance. The population of the study consists of Islamic banks and windows of Islamic banks operating in Pakistan. The sample size consists of four Islamic banks, five Islamic windows of conventional banks, and State bank of Pakistan. Purposive sampling technique was used by researcher. Semi-structured interviews were conducted and NVIVO software was used for data analysis. Findings indicate that technologies used by different banks to serve the customer are blockchain, mobile banking, customer relations management, cyber security, cloud banking, and fintech start-up. Reaction and response of the Islamic finance industry to the rise of financial technology and its impact on Pakistan is obvious.

THE INFLUENCE OF FIRM SIZE, CAPITAL ADEQUACY, AND PROFITABILITY ON LIQUIDITY RISK MANAGEMENT OF INDONESIA ISLAMIC BANKING

2018 ◽  
Vol 23 (2) ◽  
pp. 114-129
Author(s):  
Anyssa Riyan Puteri
Keyword(s):  
Risk Management ◽  
Firm Size ◽  
Hypothesis Test ◽  
Liquidity Risk ◽  
Capital Adequacy ◽  
Descriptive Statistics ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Return On Equity ◽  
Independent Variables

One of the problems facing sharia banking is liquidity risk management. Liquidity risk management in Islamic banking faces greater challenges because they need to be in accordance with Sharia. This research aims to determine the influence of firm size, capital adequacy, and profitability with return on asset and return on equity as proxies, on Indonesian Islamic banking liquidity risk management which is listed in Bank Indonesia in the period 2010-2014. This research uses panel data from eleven Islamic banks. The dependent variable in this research is liquidity risk and the independent variables are firm size, capital adequacy, and profitability with return on asset and return on equity as proxies. The method of analysis in this research uses descriptive statistics, regression model selection, classic assumption test, and hypothesis test. The results show that firm size, capital adequacy, and profitability with return on asset and return on equity as proxies simultaneously affect liquidity risk management, where partially return on equity does not affect liquidity risk management. Keywords: Capital Adequacy, Firm Size, Islamic Banking, Liquidity Risk Management, Profitability

scholarly journals MANAJEMEN RISIKO PADA BANK SYARIAH

2019 ◽  
Author(s):  
Afriyeni Afriyeni ◽  
Romi Susanto
Keyword(s):  
Risk Management ◽  
Credit Risk ◽  
Liquidity Risk ◽  
Deep Understanding ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Legal Risk ◽  
The World ◽  
Banking Business ◽  
Conventional Banks

Research and experience over the last two decades has resulted in a deep understanding of issues relating to risk management and the principles of a well established risk faced by management. The company managers are increasingly recognizing the importance of risk management. In the context of risk management, the guidelines were implemented over the years, made only for conventional banks. Whereas players in the world and national banking business not only conventional banks, but has also been enlivened by banks with Islamic principles that number continues to increase from year to year. This paper gives an overview of how risk management in Islamic banking. In general, the risks faced by Islamic banking can be classified into two major parts. Ie the same risks faced by conventional banks and the risk that is unique because it must follow the principles of sharia. Credit risk, market risk, benchmark risk, operational risk, liquidity risk, and legal risk, Islamic banks must be faced. But, because they have to abide by the rules of Sharia, the risks faced by Islamic banks had to be different.

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