Do Islamic versus conventional banks progress or regress in productivity level?

Jubilee, Ribed Vianneca W.; Kamarudin, Fakarudin; Latiff, Ahmed Razman Abdul; Hussain, Hafezali Iqbal; Tan, Khar Mang

doi:10.1186/s43093-021-00065-w

Cited by 14 publications

(14 citation statements)

References 57 publications

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“…On the other hand, the position of traditional banks is also well in the case of Earning per Share Ratio. Several studies, e. g. Mustafa (2019), Habib (2018), andJubilee et al (2021) confirmed the same outcomes of the present study. The null hypothesis (H1) is not accepted.…”

Section: Discussionsupporting

confidence: 91%

“…The findings showed that Islamic banks are more profitable than conventional banks, but there are significant differences between the two banks. Jubilee et al (2021) assessed the differences between Islamic and conventional banks' productivity in the context of Asian countries by applying DEAbased MPI panel data methodologies. They found that Islamic banks are more productive than conventional banks but not statistically significant.…”

Section: Literature Reviewmentioning

confidence: 99%

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Does the Financial Performance of Islamic Banks Are Higher Than the Traditional Banks in Bangladesh? Panel Data Analysis

2022

IJFB

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This study aims to examine the comparative financial performance between traditional and Islamic banks in Bangladesh. The study used secondary data as panel data of banks for 2016-2020. Since the data is secondary, the quantitative approach to research is considered to use financial ratio analysis (FRA). For analyzing the panel data, Decision Analyst Stats 2.0 software was used. This study randomly selected 10 scheduled commercial banks where 5 traditional and 5 Islamic banks. The results found that the financial performance of Islamic banks and traditional banks is satisfactory but more satisfactory in the case of Islamic banks in Bangladesh. The study also found that profitability has increased significantly in the banking sector in the last five years. Based on empirical findings, financial performance indicators significantly affect the financial performance of the baking sector; that’s why policymakers should care about financial performance determining factors and focus on rapid economic growth with risk recovery techniques. The present study is a small attempt to understand the current financial performance of Islamic Banks and Traditional Banks. The findings help the researchers and all parties involved in the banking system understand profitability and its role.

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Section: Discussionsupporting

confidence: 91%

Section: Literature Reviewmentioning

confidence: 99%

Does the Financial Performance of Islamic Banks Are Higher Than the Traditional Banks in Bangladesh? Panel Data Analysis

2022

IJFB

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“…For Alexakis et al [ 8 ] based on GCC region, IBs have worse cost and profit performance than CBs, but they are on a par with regards in terms of performance. Jubilee et al [ 50 ] based on 66 IBs and 319 CBs from 18 countries found that IBs are more productive than CBs, and the results from t test are further confirmed by the results from nonparametric tests. Kabir et al [ 51 ] find that IBs outperform CBs in managing liquidity and CF.…”

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 73%

The consequence of the credit risk on the financial performance in light of COVID-19: Evidence from Islamic versus conventional banks across MEA region

El-Halaby

Soliman

2022

Futur Bus J

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Purpose The increased number of nonperforming loans (NPLs) during COVID-19 pandemic has interrogated the robustness of banks and stability of the whole banking segment. We examine the impact of credit risk (CR) on financial performance (FP) by comparing Islamic banks (IBs) to conventional banks (CBs). We also investigate the influence of COVID-19 on this association. Design/methodology/approach Our sample includes the largest 200 banks across 15 countries from the Middle East and the Africa (MEA) region over a four-year period (2018–2021). Panel ordinary least squares (OLS) with fixed and random effects were used. Findings We find a negative association between NPLs and FP for IBs and CBs. We reveal that COVID-19 is partially mediated the association between NPLs and FP in case of the whole sample and separated sample of CBs while not in case of IBs. Originality The evidence of CR and FP on samples of financial sector across MEA region has not been studied in the era of COVID-19 as far as we know. Research limitations/implications This study contributes to the knowledge of the risk and financial performance during the crisis nexus and provides information that is valued to bankers, academics, managers and regulators for policy formulation.

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“…Finally, Islam considers products such as alcohol, pork and pornography haram (meaning strictly forbidden) and are as such unacceptable by Islamic finance (Nakhavali, 2017). The Islamic mode of finance differs from the conventional mode in several ways including economic roles, and supervisory roles (Jubilee et al, 2021). Many innovative Islamic financial products have been widely discussed in the Islamic finance literature (Abedifar et al, 2016;Hassan and Lewis, 2014).…”

Section: Adoption Of Islamic Finance Productsmentioning

confidence: 99%

What determines the adoption of Islamic finance products in a non-Islamic country? Empirical evidence from Cameroonian small- and medium-sized enterprises

Haruna,

Oumbé,

Kountchou

2024

JIMA

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Purpose The purpose of this paper is to examine the adoption of Islamic finance products (murabaha, musharakah, mudarabah, salam, ijara, istisna and Qard Hassan) by small and medium-sized enterprises (SMEs) in Cameroon, a non-Islamic Sub-Saharan African country. Design/methodology/approach It used primary data collected from a cross-section of 1,358 SMEs in eight regions of Cameroon using self-administered structured questionnaires. To facilitate the analyses and interpretation, these products are grouped into four groups based on certain characteristics. A multivariate probit model is estimated to take into account the interaction between these different Islamic finance products. Findings This study revealed that the desire to comply with Sharia law, awareness, attitude and intention were critical determinants of the decision to adopt Islamic finance products by Cameroonian SMEs. The least influential factors were perceived behavioral control, subjective norms, enterprise characteristics (size, age and location) and socio-demographic characteristics of the entrepreneur (gender, age and marital status). The extension of the multivariate approach permitted us to compute for predicted probabilities which revealed that there exists a synergy effect between the different Islamic finance products. That is, Cameroonian SMEs combine different Islamic finance products at the same time based on their needs. This is especially the case between the partnership-based products (musharakah and mudarabah) and manufacture/rent products (istisna and ijara). Practical implications Policymakers are encouraged to develop stakeholder-oriented strategies to promote effective consumer education in Islamic finance products which will boost awareness. Also, Islamic finance institutions should endeavor to develop innovative financial products that are Sharia-compliant and economically beneficial to the individual and business needs of SMEs. Moreover, policymakers and management of Islamic finance institutions should ensure the putting in place of effective governance structures to guide Islamic finance operations. Finally, policymakers should endeavor to take into account the possible synergy between the different Islamic finance products in their quest to develop this activity. Originality/value To the best of the authors’ knowledge, this is the first study that analyses the adoption of different Islamic finance products while taking into account the possible synergy that exists between these products.

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Do Islamic versus conventional banks progress or regress in productivity level?

Cited by 14 publications

References 57 publications

Does the Financial Performance of Islamic Banks Are Higher Than the Traditional Banks in Bangladesh? Panel Data Analysis

Does the Financial Performance of Islamic Banks Are Higher Than the Traditional Banks in Bangladesh? Panel Data Analysis

The consequence of the credit risk on the financial performance in light of COVID-19: Evidence from Islamic versus conventional banks across MEA region

What determines the adoption of Islamic finance products in a non-Islamic country? Empirical evidence from Cameroonian small- and medium-sized enterprises

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