The Implementation of Balanced Scorecard in Jordanian Islamic Banks

Balanced Scorecard (BSC) has always played an effective role in improving entities' performance. Therefore, it was widely adopted in entities in developed and developing countries. As a relatively new form of banks in the banking sector, exploring the extent of implementation of the BSC perspectives in Islamic banks in developing countries, and its impact on their performance will shed the light on the weaknesses and strengths in the strategic planning systems in these banks. Accordingly, these banks could improve their strategic planning systems. To attain that, two integrated questionnaires were designed and distributed to 355 employees and clients in 3 Jordanian Islamic banks (JIBs). The results showed that the extent of implementation of the BSC perspectives in JIBs ranged between 55% - 93%. In addition, the results showed that there is a significance positive relationship between the BSC and the financial performance (ROA/ROE) of JIBs. Accordingly, the researcher recommended JIBs to increase their interest in implementing the BSC perspectives and to create an effective alignment between all perspectives of the BSC.

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Intellectual capital and performance of Islamic and conventional banking

Journal of Management Development ◽

10.1108/jmd-01-2019-0020 ◽

2019 ◽

Vol 38 (7) ◽

pp. 518-537 ◽

Cited By ~ 2

Author(s):

Amina Buallay

Keyword(s):

Financial Performance ◽

Intellectual Capital ◽

Positive Relationship ◽

Banking Sector ◽

Market Performance ◽

Value Added ◽

High Tech ◽

Islamic Banks ◽

Content Type ◽

Conventional Banks

Purpose Intellectual capital (IC) is considered as a lifeblood of the high-tech and knowledge-based sectors. Therefore, there is a great need to highlight the importance of IC in the banking sector. Since the banking sector in the gulf countries is mainly based on Islamic and conventional banking, the purpose of this paper is to provide a comparative empirical analysis between IC efficiency in Islamic and conventional banks, and its impacts on a bank’s operational, financial and market performance. Design/methodology/approach This study examined 59 banks for five years to end up with 295 observations. The independent variable is the modified value added IC components; the dependent variables are performance indicators (return on assets, return on equity and Tobin’s Q). Two control variables are utilized in this study: bank-specific and macroeconomic. Findings The findings deduced from the empirical results demonstrate that there is a positive relationship between IC efficiency and financial performance (ROE) and market performance (TQ) in Islamic banks. However, in conventional banks, there is a positive relationship between IC and operational performance (ROE) and financial performance (ROE). Originality/value The results of this study can be used to present a successful model for the Islamic and conventional banks to concentrate more on the role of IC in enhancing the bank’s performance. In addition, the results of this study may provide a wake-up call for Islamic banks to examine the reasons for the imperfect relationship between the IC and asset efficiency (ROA), as well as for conventional banks to examine the reasons for an imperfect relationship between the IC and market value (TQ).

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A consensus-based corporate governance paradigm for Islamic banks

Qualitative Research in Financial Markets ◽

10.1108/qrfm-01-2013-0002 ◽

2014 ◽

Vol 6 (1) ◽

pp. 93-108 ◽

Cited By ~ 4

Author(s):

Monal Abdel-Baki ◽

Valerio Leone Sciabolazza

Keyword(s):

Corporate Governance ◽

Financial Performance ◽

Banking Sector ◽

Performance Metrics ◽

Islamic Banking ◽

Islamic Banks ◽

Content Type ◽

Sustainable Finance ◽

Market Driven ◽

The Needy

Purpose – Islamic banking is a viable sustainable banking model that has shown resilience to financial crises. The aim of this research is to design a consensus-based ethical and market-driven corporate governance index (CGI) to boost financial performance and ensure compliance with Islamic rulings. Design/methodology/approach – The design of the CGI is the outcome of the feedback obtained from a cross-country survey to measure bank efforts in enhancing corporate governance (CG) throughout the ten-year period of 2001-2011. The CGI is divided into six core CG themes and 40 sub-themes. Findings – First, the results of the multiple regression analysis show a consistent positive relationship between CG and financial performance metrics. Second, the authors detect misaligned compensation structures for directors. Third, poor governance leads to higher risk exposures. Research limitations/implications – CG in Islamic banks is yet an evolving discipline and infant practice. This research aims to introduce a CGI that should be updated and improved as the discipline evolves. Practical implications – The research concludes by proposing a CG paradigm. The outcome of the research could also be of use to both Islamic banks and to the rapidly growing sustainable banking sector in designing a similar CGI and CG model incorporating the ethical features of sustainable finance. Social implications – The core ethos of Islam are: avoiding the exploitation of the needy, avoiding excessively risky transactions, avoiding unethical transactions and justice, equity and income redistribution. If properly applied, Islamic banking will display all features of sustainable finance as well as enhance social welfare. Originality/value – To the best of the authors' knowledge, this is the first CGI that is based on an ethical and all-inclusive input of all stakeholders.

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

Bukhori: Kajian Ekonomi dan Keuangan Islam ◽

10.35912/bukhori.v1i1.118 ◽

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.

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The The Impact of Liquidity, Credit, and Financial Leverage Risks on Financial Performance of Islamic Banks: A Case of Sudanese Banking Sector

Risk and Financial Management ◽

10.30560/rfm.v2n2p59 ◽

2020 ◽

Vol 2 (2) ◽

pp. p59

Author(s):

Ahmed Nourrein Ahmed Mennawi

Keyword(s):

Credit Risk ◽

Financial Performance ◽

Banking Sector ◽

Negative Impact ◽

Liquidity Risk ◽

Positive Influence ◽

Islamic Banks ◽

Financial Leverage ◽

Loan Financing ◽

The Impact

This study aims to investigate the impact of liquidity, credit, and financial leverage risks on the financial performance of Islam banks in Sudan during the period of 2008 - 2018. Panel dataset of 143 observations from (13) banks has been used in this study. Two models of ROA and NPM have been constructed using robust random effects estimates for testing the study hypotheses. The independent variables consist of liquidity and credit risks plus the financial Leverage ratio. Credit risk that measured by nonperformance of loan (financing) and provision of loan (financing) loss ratios; while the liquidity risk measured by cash to deposits ratio, liquid assets to total assets ratio and total loan (financing) to total deposits ratio. The financial performance of Islamic banks in Sudan measured by the ratios of return on assets and net profit margin. The results reveal that the credit risk and financial leverage have significant and negative impact on the financial performance of Islamic banks in Sudan, whereas the liquidity risk generally found to be insignificant. Despite that, the liquidity risk in term of liquid assets to total assets ratio provides a significant and positive influence on the financial performance of Sudanese banks. Finally, the importance of this study is that it touches the most significant types of risks that Sudanese Islamic banks face during their operational cycles.

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The policy-led sustainability and financial performance linkage in the banking sector: case of Bangladesh

Banks and Bank Systems ◽

10.21511/bbs.14(4).2019.09 ◽

2019 ◽

Vol 14 (4) ◽

pp. 89-103 ◽

Cited By ~ 1

Author(s):

Samiul Parvez Ahmed ◽

Sarwar Uddin Ahmed ◽

Mohammad Fahad Noor ◽

Zaima Ahmed ◽

Uttam Karmaker

Keyword(s):

Developing Countries ◽

Financial Performance ◽

Banking Sector ◽

Positive Impact ◽

Developed Countries ◽

Influential Factor ◽

Political Interference ◽

Policy Guideline ◽

Research Findings ◽

Sustainability Initiatives

Researchers in developed countries argue that banks should be free to decide about their sustainability initiatives without the interference from regulators. However, researchers in developing countries tend to think differently. This study aimed to focus on this argument by examining the linkage between sustainability and financial performance (SFP) aided through regulatory policy guidelines. In doing so, a comparative study was conducted between 2012 and 2018 to compare the pre- and post-status of SFP due to implementation of policy measures. Environmental, social and governance (ESG) scores were calculated and related with financial performance (return on assets) through regression analysis. The sample data includes 30 private commercial banks (PCBs) in Bangladesh. The analysis of the data shows that during these years, the overall sustainability performance, i.e., environmental, social and governance scores of the banks increased by 33 percent. However, the transformation of this performance into better financial performance could not been established even when age and size were taken into account. The current turbulent state of the banking sector due to growing non-performing loan has been identified as the single most influential factor for this neutral result. Research findings suggest that policy guideline initiatives do have a positive impact on bank sustainability. However, exogenous factors, such as political interference, may appease, deviate and prolong its impact on financial performance. This work will enhance the understanding of academics and policy-makers about the feasibility and impact of the policy-led sustainability model in the banking sector, particularly in developing countries.

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The Analysis of Intellectual Capital Performance of Islamic Bank in Indonesia

GATR Global Journal of Business Social Sciences Review - GATR Global Journal of Business and Social Science Review (GJBSSR) Vol.7(1) Jan-Mar 2019 ◽

10.35609/gjbssr.2014.2.4(6) ◽

2014 ◽

Vol 2 (4) ◽

pp. 53-60

Author(s):

Radhiyatul Fitriyeni ◽

Yurniwati Yurniwati

Keyword(s):

Correlation Analysis ◽

Financial Performance ◽

Intellectual Capital ◽

Sampling Method ◽

Positive Relationship ◽

Value Added ◽

Company Performance ◽

Islamic Banks ◽

Capital Efficiency ◽

The Relationship

Objective - The purpose of this paper was to assess the influence of Value Added Intellectual Capital (VAIC) towards company performances such as: profitability and productivity of Islamic banks of Indonesia measured by ROA, ROE, ROI and ATO. Methodology/Technique - This research conducted purposive sampling method. Correlation analysis was applied to measure the influence of ICE on company Performance. SPSS 18 was applied for correlation test. VAIC was calculated for measuring intellectual capital efficiency. Findings - VAIC had a positive relationship to company performance such as financial performance and productivity. The highest value of correlation was the relationship between VAIC and ATO. The lowest value of correlation was the relationship between VAIC to ROE. Novelty - This research assessedthe influence of VAIC towards 11 Islamic Banks in Indonesia. Type of Paper - Empirical Keywords: Intellectual capital, VAIC, corporate performance, financial performance, productivity, Indonesia, Islamic Banks.

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Intellectual capital efficiency and bank’s performance

Pacific Accounting Review ◽

10.1108/par-04-2019-0039 ◽

2019 ◽

Vol 31 (4) ◽

pp. 672-694 ◽

Cited By ~ 2

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.

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Measuring the Performance of Jordanian Islamic Banks

Journal of Public Administration and Governance ◽

10.5296/jpag.v7i1.10575 ◽

2017 ◽

Vol 7 (1) ◽

Author(s):

Yazan Radwan Qasim ◽

Yazis Mohamad ◽

Norhazlina Ibrahim

Keyword(s):

Economic Growth ◽

Performance Measurement ◽

Financial Performance ◽

Banking Sector ◽

Driving Forces ◽

Secondary Data ◽

Measurement Methods ◽

Measurement Tool ◽

Islamic Banks ◽

Performance Measurements

The banking sector is believed to be one of the driving forces of economic growth of many countries. Muslim jurists have realized the need to get the benefit of banking activities that adopts a lawful way with Islamic rule. Jordanian Islamic banks suffer from measure the financial performance using effective measurement tool based on various indicators. The main aim of this research is to analysis and ranks the performance levels of the Jordanian Islamic banks using suitable measurement methods. This study utilizes secondary data to measures the performance of three Jordanian Islamic banks (JIBFI, IIAB, and JDIB) over the period 2010-2013 by integrated tools; FRA, DEA, and MI. The significant results indicate that JDIB recorded the best performance rank based the three measurements tools, followed IIAB, and lowest rank is JIBFI. The contribution of this study is performance measurements of Jordanian Islamic banks based on the combination of FRA, DEA, and MI rather than utilize one measurement tool.Keywords: Jordanian Islamic banks, performance measurement, FRA, DEA, MI.

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

Organization Theory Review ◽

10.32350/otr.0202.01 ◽

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.

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Influence of strategic planning and organizational resources on financial performance of state corporations: A case of Kenya Electricity Transmission Company Limited (KETRACO)

International Journal of Management and Leadership Studies ◽

10.52281/jv3i102 ◽

2021 ◽

pp. 1-11

Author(s):

Jackson Gachara ◽

Washington Okeyo

Keyword(s):

Strategic Planning ◽

Financial Performance ◽

Positive Relationship ◽

Target Population ◽

Leadership Theory ◽

Critical Examination ◽

Organizational Resources ◽

Electricity Transmission ◽

Company Limited ◽

Strong Positive Relationship

Abstract Influence of strategic planning and organizational resources on the financial performance of state corporations. The study aimed to establish the influence of strategic planning and organizational resources on the financial performance of state corporations a case study of KETRACO with specific objectives being to examine how strategic planning and organization resources affect financial performance. The findings will be used as a reference point to other researchers in the same field. The study findings will be beneficial to the foundation of future studies and provided a critical examination and the knowledge generated by this study will enable scholars to improve and develop a better understanding of the subject. The study was anchored on adaptive leadership theory and reinforced by trait leadership theory. The study adopted a descriptive research design with a target population of 385 respondents. Stratified proportion sampling was used to select 121 respondents. Questionnaires were used for data collection, and a pilot study was conducted on the questionnaires. Data were analyzed using descriptive statistics and inferential statistics. The study established a strong positive relationship between strategic planning and financial performance (r= 0.548, p=0.000), and that strategic planning significantly influences financial performance. The regression analysis revealed a relationship R = 0.302 which showed a significant correlation and revealed that organization resources and financial performance are significantly connected, the study established a strong positive relationship between the organization resources and financial performance (r= 0.302, p=0.004). The study concludes that strategic planning statistically and significantly affects financial performance and that there is a positive relation between organization resources and the variations in financial performance can be explained by other study variables. The study recommends that KETRACO management should develop and formulate guidelines, governing structure, and strategic plans for effective implementation of organizational goals and objectives. Keywords: Financial Performance, Strategic Planning, Organization Resources, Kenya Electricity Transmission Company Limited, State Corporations in Kenya.

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