scholarly journals The impact of working capital and financial structure on profitability of islamic banking industry

2012 ◽  
Vol 2 (7) ◽  
pp. 2625-2630 ◽  
Author(s):  
Mohammad Khodaei Valahzaghard ◽  
Ali Taherinejhad
Keyword(s):  
Banking Industry ◽  
Financial Structure ◽  
Islamic Banking ◽  
Working Capital ◽  
The Impact

Islamic Banking and Economic Growth

2020 ◽  
pp. 86-114
Author(s):  
Bilal Kchouri ◽  
Thorsten Lehnert
Keyword(s):  
Economic Growth ◽  
Developing Countries ◽  
Panel Data ◽  
Economic Performance ◽  
Fixed Effects ◽  
Banking Industry ◽  
Financial Structure ◽  
Islamic Banking ◽  
Total Size ◽  
Macroeconomic Factors

This chapter measures the effect of growth in Islamic Banking assets on economic performance in a sample of 32 developed and developing countries based on data for the period 2000-2017. The findings show that, although Islamic banks are considered small relative to the total size of the financial sector, these are positively correlated with economic growth even after controlling for financial structure, macroeconomic factors and other variables. The outcome is robust across different econometric specifications like pooling OLS, fixed effects, and panel data with over-identified GMM. The results are confirmed on two different indicators of Islamic banking and hold for different periods. Empirical findings confirm theoretical expectations that although Islamic banking still represents a relatively very small share of the financial system, it is growing and generating an economic boost to ensure a stable banking industry.

DOMAINS AND MOTIVES OF MUSHARAKAH SPUR IN THE ISLAMIC BANKING INDUSTRY OF PAKISTAN

2019 ◽  
pp. 1-29 ◽  
Author(s):  
MUHAMMAD NOUMAN ◽  
KARIM ULLAH ◽  
SHAFIULLAH JAN
Keyword(s):  
Banking Industry ◽  
High Volume ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Working Capital ◽  
Government Interventions ◽  
Five Factors ◽  
Capital Financing ◽  
Consistent Tendency ◽  
The Ideal

Participatory financing schemes, including Musharakah and Mudarabah, are theoretically claimed to be the ideal modes of Islamic financing, but their practice is restrained by several factors. That is why Islamic banks have a consistent tendency to avoid participatory financing on the assets side throughout the world. However, recently this trend has started changing in Pakistan and Indonesia where the share of participatory finance has raised significantly in the financing portfolio of Islamic banks. The present paper explores this recent spur of participatory finance in Pakistan in terms of its domains of applications and the responsible factors. The findings lead to a novel posteriori framework which shows that the shift towards participatory financing is primarily characterized by increase in working capital financing and commodity operations financing through Musharakah mode Islamic banks. Moreover, five factors contribute to the spur of participatory financing including: (i) introducing varieties in Musharakah, (ii) enhanced applicability, (iii) high volume projects, (iv) government interventions, and (v) regulator’s role. The framework can significantly advance understanding with respect to the implementation theory of participation financing within Islamic banking and related Shariah compliance and regulation.

scholarly journals Spin-off and market share in the Indonesian Islamic banking industry: a difference in difference analysis

2017 ◽  
Vol 12 (4) ◽  
pp. 540-551 ◽  
Author(s):  
M. Nur Rianto Al Arif
Keyword(s):  
Market Share ◽  
Banking Industry ◽  
Control Group ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Difference In Difference ◽  
Difference Analysis ◽  
Business Units ◽  
Conventional Banks ◽  
The Impact

Abstract According to The Act No. 21 of 2008 concerning Islamic Banking in Indonesia, the conventional banks are obligated to spun-off their Islamic business units after achieving a certain set of requirements. The spin-off requirements are: (i) reach 50% market share asset of its parents; or (ii) 15 years after the implementation of the Islamic Banking Act. This study emphasizes the impact of Islamic banks' spin-off on market share. The method used in this study is a difference in difference analysis. This technique is a quasi-experiment separate into two groups, such as the treatment groups (four spin-offs' banks) and control group (two fullfledged Islamic banks). This study used quarterly data from 2005 until 2016. The results show that, first, there is a difference in the Islamic banks' market share between pre- and post-spinoff. Second, there is a difference in the market share of spin-offs' banks between pre- and postspin- off. Third, there are there external factors that can affect the Islamic banks' market share, i.e., inflation rate, interest rate, and economic growth rate. The paper is a useful source of information that may provide relevant guidelines in helping the future development of spin-off activity in Islamic banking industry. The finding could be helpful for policymakers to create a supporting strategy to accelerate the development of Islamic banking industry. This result also could be of use for Islamic banking industries in other countries.

PANDEMI COVID-19 IMPLIKASI BAGI PEMBIAYAAN BANK SYARIAH DI INDONESIA

2021 ◽  
Vol 10 (1) ◽  
pp. 164-181
Author(s):  
Ana Zahrotun Nihayah ◽  
Lathif Hanafir Rifqi
Keyword(s):  
Financial Services ◽  
Commercial Banks ◽  
Banking Industry ◽  
Descriptive Study ◽  
Islamic Banking ◽  
Financing Policies ◽  
The World ◽  
Long Time ◽  
Almost All ◽  
The Impact

The Covid-19 pandemic is the result of the spread of coronavirus that occurs almost all over the world. In Indonesia, covid-19 first occurred on 02 March 2020. At that time, Indonesian citizen was infected by one of the Foreign Nationals of Japan. The transmission of covid-19 is increasing for a long time, until now covid-19 has spread in almost all 34 provinces in Indonesia. Health problems that further adversely affect almost all sectors of the industry, one of which is the Islamic banking industry. Therefore, the Financial Services Authority (OJK) issued several stimulus policies as a measure of anticipation of customers defaulting. This research is a descriptive study with the aim to determine the impact of pandemic covid-19 on Sharia bank financing in Indonesia. The samples used in this study were 11 Sharia commercial banks. The results showed that there are 8 Sharia commercial banks experiencing a downward trend in breeding, especially in April 2020. It can be concluded that the impact of covid-19 has a decrease in Sharia banking financing. Policies carried out by each Sharia commercial bank related to the anticipation of covid-19 to its financing activities, each bank implements a financing restructuring policy to debtors affected by the spread of covid-19

Competition and market structure of the Malaysian Islamic banking industry

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Mohd Faizal Basri
Keyword(s):  
Market Structure ◽  
Monopolistic Competition ◽  
Banking Industry ◽  
Financial System ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Content Type ◽  
Under Performing ◽  
Conventional Banks ◽  
The Impact

Purpose This paper aims to investigate the impact of competition in the Malaysian Islamic banking industry and the market structure of the industry by focusing on the particular impact created by the entrance of fully fledged foreign Islamic banks plus the introduction of Islamic subsidiaries of existing conventional banks in the country (domestic and foreign ownership). Design/methodology/approach Using a sample of 16 Islamic banks in the country that operated between 2008 and 2015, this paper measures the competition among the Islamic banks using the Panzar-Rosse Model and by looking at the market structure of the industry using the k-bank concentration ratio and the Herfindahl-Hirschman Index. Findings The study found that between 2008 and 2015, the Malaysian Islamic banking industry operated in monopolistic competition conditions with a moderately concentrated market structure. The introduction of foreign Islamic banks caused the market structure to become more competitive and less concentrated by comparing the results that include foreign Islamic banks against the results generated with a subsample of domestic Islamic banks only. Bank Negara Malaysia’s (BNM’s) financial reform and the liberalisation of the financial system were proven to induce competition making the financial system more resilient, competitive and dynamic. The Islamic banks have recorded consistently increased annual performance with the under-performing Islamic banks catching up on the top performers. Originality/value Very few research studies have focused on the market structure and competition of the Islamic banking industry in Malaysia, especially using recent financial data; this study will contribute to filling the existing gap.

scholarly journals Relevance of Shari’ah Governance in Driving Performance of Islamic Banks during the Financial Crisis: International Evidence

2020 ◽  
Author(s):  
Naji Mansour Nomran ◽  
Razali Haron
Keyword(s):  
Financial Crisis ◽  
High Efficiency ◽  
Banking Industry ◽  
Small Sample ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Governance Mechanism ◽  
Gmm Estimator ◽  
The Impact ◽  
Positive Effect

This study aims to examine the impact of Shari’ah governance mechanism on the performance of Islamic banks (IBs) during the financial crisis of 2008. Data were collected from 66 IBs over 18 countries covering the period of 2007–2015 and analyzed using the System-GMM estimator. The findings indicate that an increase in SSB effectiveness increases IBs’ performance even during the crisis periods. A possible justification for this positive effect is related to the SG structure of IBs that allows them to undertake higher risks to achieve a high efficiency level. For this, the IBs, policymakers and practitioners should consider these findings when aiming to improve SG practices in the Islamic banking industry, which in turn may help in protecting IBs during crisis and non-crisis periods. More specifically, they should give due importance to SSB (size, cross-membership, educational qualification, reputation and expertise) in enhancing the performance of IBs during the crisis and non-crisis periods. This study provides additional evidence on how IBs can sustain their performance during either crisis or non-crisis periods through adopting appropriate SG structure. However, the study only focuses on a small sample of 66 IBs due to lack of the data.

The impact of COVID-19 on Islamic banks in Bangladesh: a perspective of Marxian “circuit of merchant’s capital”

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Mohammad Dulal Miah ◽  
Yasushi Suzuki ◽  
S. M. Sohrab Uddin
Keyword(s):  
Financial Services ◽  
Balance Sheet ◽  
Banking System ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Working Capital ◽  
Content Type ◽  
Increased Risk ◽  
Merchant Capital ◽  
The Impact

Purpose This paper aims to assess the probable impact of COVID-19 on the Islamic banking system in Bangladesh. More specifically, it attempts to test the hypothesis that Islamic banks are exposed to increased risk because of their role as a provider of “merchant capital” including financing for trade, commerce and working capital, which are believed to be severely disrupted by the COVID-19. Design/methodology/approach The paper draws upon the Marxian tradition on the identification of the circuit of “merchant capital” separated from the circuit of “interest-bearing capital.” Moreover, the research adopts the balance sheet approach to trace the sectoral distribution of investment as well as sources of income of Islamic banks. Findings The research supports the hypothesis that the investment pattern of Islamic banks is skewed toward the trade and merchant’s financing. More than two-third of Islamic banks’ investment, and income thereof, is concentrated on working capital and trade finance. As these sectors are largely vulnerable to the economic shock resulting from COVID-19, Islamic banks in Bangladesh are likely to be affected through this channel. Research limitations/implications The research focuses only on Islamic banks in Bangladesh. Further study can assess the impact of COVID-19 on conventional and Islamic banks in other countries to find similarities and differences with the findings of the current research. Practical implications The finding of this research will be useful for bank managers, policymakers and users of financial services. In particular, this study provides important information useful for regulators in devising appropriate policies which aim to mitigate the adverse impact of COVID-19. Originality/value To the best of the authors’ knowledge, this is the first study that attempts to examine the impact of COVID-19 on Islamic banking system in Bangladesh, a country where Islamic banks occupy one-third of the total banking system’s assets.

scholarly journals Pengaruh Pembiayaan Berdasarkan Jenis Penggunaan Terhadap Non Performing Financing Pada Bank Umum Syariah (BUS) Dan Unit Usaha Syariah (UUS) Di Indonesia Periode Januari 2009 – Desember 2015

2017 ◽  
Vol 3 (12) ◽  
pp. 1006
Author(s):  
Diah Ayu Legowati ◽  
Ari Prasetyo
Keyword(s):  
Financial Services ◽  
Quantitative Methods ◽  
Secondary Data ◽  
Islamic Banking ◽  
Working Capital ◽  
Significance Level ◽  
Investment Financing ◽  
Capital Financing ◽  
Financing And Investment ◽  
The Impact

The purpose of this research was to analyze the impact of working capital financing, investment financing and consumption financing on Non Performing Financing of Islamic Banking Industry in Indonesia from January 2009 until December 2015. This research using a quantitative methods. The data used are the secondary data from Financial Services Authority official website. The analytical methods used in this research is the method of multiple linear regression with a significance level of 0,05. Based on the analysis, working capital financing and investment financing partially provide a significant impact on the ratio of non performing financing. Only consumption did not significantly affect the ratio of non performing financing. However, working capital financing, investment financing and consumption financing are simultaneously provide a significant impact on the ratio of non performing financing.

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