A Comparative Analysis on Islamic Bank Performance and Efficiency Risk: Pre and Post IFSA 2013

Abstract

It is recognized that performance of the banking industry has an impact to the economic growth of a developed economies. The performance of the bank may impact the growth of the economy, as profits may shape the customers’ decision on investments and savings. Regulation affecting the design of banking governance structure; hence, it plays a vital role in determination of banking industry performance. IFSA 2013 was established to promote financial stability and compliance to Shariah and further strengthen the regulation of Islamic financial institutions. This paper aims to examine whether IFSA 2013, bank’s risk-taking behavior and efficiency will enhance or impede performance of Islamic banks in Malaysia.