scholarly journals Comparative Financial Analysis of Conventional and Islamic Banks of Developing Countries

2020 ◽  
Vol 3 (4) ◽  
Author(s):  
Md. Abdul Halim* (Corresponding Author) ◽  
Md. Nazmul Islam (Corresponding Author) ◽  
Abdul Gaffar Khan
Keyword(s):  
Policy Implementation ◽  
Financial Performance ◽  
Commercial Banks ◽  
Financial Analysis ◽  
Islamic Banks ◽  
Good Position ◽  
Insurance Premiums ◽  
Efficiency And Effectiveness ◽  
The Cost ◽  
Conventional And Islamic Banks

This study investigated the financial performance of Bangladesh's State-Owned Commercial Banks, Islami Shariah Based Private commercial Banks and Conventional Private Commercial Banks over 12 years from 2006 to 2017. The objective of this study is to find out the financial performance of a bank based on CAMEL indicators. The finding of this study is that Islami Shariah Based Private commercial Banks and Conventional Private Commercial Banks has a good position than State-Owned Commercial Banks. Specific, Pubali Bank Limited, Standard Bank Limited, Prime Bank Limited, City Bank Limited and Al-Arafah Islami Bank Limited are in the best position in Bangladesh under this study. We also found that the performance of State-Owned Commercial Banks is not good. This study gives a policy implementation according to results. 1. State-Owned Commercial Banks should restructure the infrastructure. 2. It needs more emphasis on efficiency and effectiveness to control the cost and loan investment. 3. It will be required to pay more in insurance premiums. 4. It should be born in mine, for higher rating banks. We suggest to a higher number of rating banks that it’s hinders a bank's ability to expand by investing, consolidating, or adding more branches. We also suggest to all lower rating banks. The institutions with a poor rating will be required to pay more in insurance premiums.

THE EFFECT OF THE SHARIA SUPERVISORY BOARD AND THE BOARD OF COMMISSIONERS ON THE FINANCIAL PERFORMANCE OF SHARIA COMMERCIAL BANKS IN INDONESIA

2021 ◽  
Vol 3 (1) ◽  
pp. 60-73
Author(s):  
Ahmad Fauzul Hakim Hasibuan ◽  
Fuadi Fuadi ◽  
Angga Syahputra
Keyword(s):  
Data Analysis ◽  
Financial Performance ◽  
Commercial Banks ◽  
Supervisory Board ◽  
Secondary Data ◽  
Sampling Technique ◽  
Islamic Banks ◽  
Purposive Sampling ◽  
Islamic Bank

This study aims to determine the influence of the Sharia Supervisory Board and the Board of Commissioners on the Financial Performance of Islamic Banks in Indonesia. This study used secondary data from 12 banks.The sampling technique used is the purposive sampling technique. The method of data analysis used is multiple linear regression.The results partially show that the sharia supervisory board and board of commissioners positively and significantly influence the financial performance of Islamic banks in Indonesia. Simultaneously,the board of commissioners and the sharia supervisory board positively and significantly influence the financial performance of Islamic bank

scholarly journals Implementation of Good Governance Business Sharia (GGBS) and Its Implications for Sharia Conformity and Profitability (SCnP) Financial Performance in Sharia Commercial Banks in Indonesia

2020 ◽  
Vol 1 (1) ◽  
pp. 1-10
Author(s):  
Nindi Apriani ◽  
Kusnendi Kusnendi ◽  
Firmansyah Firmansyah
Keyword(s):  
Financial Performance ◽  
Commercial Banks ◽  
Good Governance ◽  
Islamic Banks ◽  
Panel Data Regression ◽  
Analysis Technique ◽  
Data Regression ◽  
Negative Effect ◽  
High Level ◽  
A Company

Abstract.     Financial performance is an analysis carried out to see the extent to which a company carries out the rules of implementing finances properly and correctly. The measurement of the financial performance of Islamic banks mostly still uses conventional measurement indicators namely profitability. This is considered less relevant, because the measurement of the performance of Islamic banks should be measured based on the suitability of sharia. Sharia Conformity and Profitability is a tool that measures the integrity of a bank, but still does not ignore the conventional side because the purpose of Islamic banks is to seek profit. This study aims to analyze the influence of Good Governance Business Sharia on Sharia Conformity and Profitability of Islamic Commercial Banks in Indonesia. The population in this study used all Islamic Commercial Banks (BUS) in Indonesia. The sample used was eleven Sharia Commercial Banks in Indonesia in 2012-2016. The method in this study uses explanatory research methods. The data analysis technique used is panel data regression. The results showed that the level of implementation of Good Governance Business Sharia was good enough and tended to increase. The Sharia Conformity and Profitability level of Islamic Commercial Banks in Indonesia has a high level of performance which means that the average performance is above on average. The implementation of Good Governance Business Sharia (GGBS) has a positive effect on Sharia Conformity but has a negative effect on Profitability. The results have important implications for Islamic Commercial Banks and regulator regarding Good Governance Business Sharia that should be modified as it aligns with sharia conformity but does not have impact on profitability. Keywords.    Financial performance, Sharia Conformity and Profitability, Good Governance Business Sharia.

scholarly journals Parameters of Profitability: Evidence From Conventional and Islamic Banks of Bangladesh

2018 ◽  
Vol 8 (4) ◽  
pp. 158
Author(s):  
K. M. Golam Muhiuddin ◽  
Nusrat Jahan
Keyword(s):  
Commercial Banks ◽  
Banking System ◽  
Specific Factor ◽  
Economic Factors ◽  
Islamic Banks ◽  
Specific Factors ◽  
Conventional Banks ◽  
The Impact ◽  
Bank Specific Factors ◽  
Conventional And Islamic Banks

This paper evaluates the commercial banks of Bangladesh in terms of profitability dimension of performance and also examines the impact of selected determinants and banking system on this dimension of performance. Evaluation of trend in profitability of listed commercial banks of Bangladesh reveals that, on an average, profitability is exhibiting a decreasing trend over the selected period; however, the profitability performance of Islamic banks remained rather high compared to Conventional banks. Profitability measured by Return on Asset is found to be significantly affected by the bank-specific factors, industry-specific factor and the banking system. However, macro-economic factors evidently have no significant impact on profitability of commercial banks of Bangladesh.

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 Conducting Business with God: Is God Blessing Islamic Banks with Better Financial Performance than Conventional Banks?

2019 ◽  
Vol 6 (2) ◽  
pp. 40
Author(s):  
Musaed S. Alali
Keyword(s):  
Financial Performance ◽  
Financial Analysis ◽  
Stock Exchange ◽  
The Other ◽  
Islamic Banks ◽  
Return On Assets ◽  
Return On Equity ◽  
Significant Difference ◽  
Kuwait Stock Exchange ◽  
Conventional Banks

This study aims to compare the financial performance between Islamic and conventional banks listed at Kuwait stock exchange over the period 2011-2018 using the modified DuPont model of financial analysis which is based on the analysis of return on equity (ROE). Unlike previous studies where researchers compared the performance on a bank-to-bank basis, this study examines the aggregate ratios of Islamic banks and compare it to aggregate ratios of conventional banks. The study also adds volatility into the model since consistency in returns indicated a more stable sector.  Results obtained from this study showed that conventional banks in Kuwait had a better mean performance during the study period in terms of both return on assets (ROA) and return in equity (ROE), Islamic banks also showed a higher deviation in these two ratios resulting in a lower Sharpe ratio. While the results showed no statistically significant mean difference between Islamic and conventional banks in terms of return on assets (ROA), the results also showed a statistically significant difference in mean return on equity (ROE) between the two sub-sectors.  On the other hand, Islamic banks showed an impressive improvement in their ratios during the last three years of the study period which impose a real threat to conventional banks in the future.

scholarly journals Impact of Audit Committee Quality on the Financial Performance of Conventional and Islamic Banks

2021 ◽  
Vol 14 (4) ◽  
pp. 176
Author(s):  
Achraf Haddad ◽  
Anis El Ammari ◽  
Abdelfattah Bouri
Keyword(s):  
Financial Performance ◽  
Audit Committee ◽  
Evaluation Method ◽  
Positive Impact ◽  
Generalized Least Squares ◽  
Audit Committees ◽  
Subprime Crisis ◽  
Islamic Banks ◽  
Conventional Banks ◽  
Conventional And Islamic Banks

A lot of previous research studied the relationship between audit committee quality and the financial performance of conventional banks before and during the subprime crisis, whereas some other investigations analyzed the same association in the framework of Islamic banks. However, no study has compared these two correlations either before, during, or after the subprime crisis. Several reasons explain the differences, such as the audit committee quality of each bank type, the evaluation method of the financial performance, the research peculiarities, the methodology, the data, and the interpretation. This research aims to compare the impacts of the audit committees’ quality on the financial performance of Islamic and conventional banks between 2010 and 2019. The financial performance measures and audit committees’ determinants of the conventional and Islamic banks concerned 112 banks of each type. The collected data covered four continents: America, Asia, Africa, and Europe. Impacts were compared by using the Generalized Least Squares analysis. The results showed that the audit committee reduced the profitability of two bank types. Moreover, it harmed the conventional banks’ efficiency but reported an unclear effect within Islamic banks. Even so, we noticed that the audit committee had a positive impact on the conventional banks’ liquidity, while the same effect was apparently ambiguous for the Islamic banks’ liquidity. For solvency, the audit committee positively influenced conventional banks while it affected that of Islamic banks.

scholarly journals PENGARUH MODAL INTELEKTUAL TERHADAP KINERJA KEUANGAN PERBANKAN UMUM SYARIAH BERDASARKAN ISLAMICITY PERFORMANCE INDEX

2019 ◽  
Vol 4 (1) ◽  
pp. 162
Author(s):  
Mulqi Nazra ◽  
Suazhari Suazhari
Keyword(s):  
Financial Performance ◽  
Intellectual Capital ◽  
Performance Index ◽  
Commercial Banks ◽  
Sampling Method ◽  
Negative Influence ◽  
Profit Sharing ◽  
Performance Ratio ◽  
Islamic Banks ◽  
Analysis Technique

The purpose of this reaserch is to examine the influence of intellectual capital toward financial performance based on islamicity performance index of Islamic banks in Indonesia during 2015-2017. The samples of this study are twelve Islamic commercial banks that were initially selected by using purposive sampling method. Islamicity performance index is  used as a measurement of financial performance of Islamic banks which are consist of profit sharing ratio and zakat performance ratio. The analysis technique performed in this study is partial least squares (PLS). The results of this reaserch show that Intellectual capital has negative influence to financial performance.

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