Impacts of ownership structure on the financial performance of conventional and Islamic banks in the agency theory context

Haddad, Achraf; Ammari, Anis El; Bouri, Abdelfettah

doi:10.22495/cocv17i3art4

Cited by 7 publications

(3 citation statements)

References 104 publications

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“…Replacing the ownership variable with the type of ownership (a dummy variable that equals 1 if state ownership is greater than 20%) also yields a similar significant result with respect to the influence of state ownership on the profitability of conventional banks. This finding is in line with those of Fathi and Elbannan (2017) and Rosalina and Nugraha (2019) but contradicts those of Barth et al (2001), Kobeissi and Sun (2020), and partially those of Shawtari (2018) and Haddad et al (2020).…”

Section: State Ownership and Bank Performancesupporting

confidence: 75%

State ownership and bank performance: conventional vs Islamic banks

Alshammari

2021

JIABR

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Purpose This paper aims to examine the effect of state ownership on bank performance for all banks in the Gulf Cooperation Council (GCC) countries during the period 2003 – 2018, for two distinct banking systems: the conventional and the Islamic banking systems. Design/methodology/approach To achieve the goal of the study, this paper uses a mean t-test to examine the mean difference of the related variables for both banking systems, and a regression test (using the GMM method) to explore the effect of state ownership on bank performance. Findings The most important result of the analysis is that state ownership has a significantly positive influence on bank performance for conventional banks but not for Islamic banks, in the GCC area. Originality/value This study adds to the scarce related literature comparative empirical results with respect to the impact of ownership on the performance of two different banking systems: the conventional system and the Islamic banking system in the GCC area. This study is likely to have implications for policymakers in terms of developing rules relevant to the governance of GCC’s two banking systems that can help to support the stability of the whole banking sector.

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Section: State Ownership and Bank Performancesupporting

confidence: 75%

State ownership and bank performance: conventional vs Islamic banks

Alshammari

2021

JIABR

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“…The bank size was measured using total assets. The bank size was log-transformed following the approach adopted by Haddad et al (2020), since it was not normally distributed. Management inefficiency reflects operating expenses as a percentage of total assets.…”

Section: Methodsmentioning

confidence: 99%

Effect of Ownership on the Performance of Licensed Commercial Banks in Sri Lanka

Ekanayake,

Wanniarachchige

2023

J. Mgt. Matters

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Despite the availability of many studies on the ownership-performance association, existing literature provides contradictory evidence on the effect of ownership on bank performance. Therefore, this study examines the effect of ownership on the performance of licensed commercial banks in Sri Lanka using annual data from 2012 to 2021. The data was collected from the published annual reports of 18 licensed commercial banks in Sri Lanka. Bank ownership was categorized as state, private, and foreign and included in the model using two dummy variables. Return on equity, net interest margin, and nonperforming loans were used as bank performance indicators. Three random effects panel regression models were used to explore the effect of ownership on the three measures of bank performance while controlling for bank size, loan-to-deposit ratio, income diversification, and management inefficiency. The results suggest that state-owned banks outperform other banks in terms of return on equity. However, their performance in terms of net interest margin and non-performing loans was not significantly different from that of other banks. Therefore, the evidence in this study is inadequate to claim a straightforward association between ownership and bank performance. Nevertheless, this study provides recent evidence of the effect of ownership on bank performance in Sri Lanka. Further, the findings of this study will provide insights for the government, banks, and policymakers in formulating appropriate policies to improve the performance of the banking sector

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“…al., (2023) revealed strong relationship between GDP growth and the performance of Islamic banks for Islamic banks in Indonesia and Malaysia. Haddad, et. al., (2020) and Setyaningrum et.…”

Section: Introductionmentioning

confidence: 99%

A Cross-Country Analysis of Islamic Bank’s Performance in Malaysia and Indonesia

Qomar,

Rusgianto,

Muttaqin

et al. 2024

JES

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This study aims to examine the financial performance of Islamic banks in Indonesia and Malaysia, with a specific focus on optimizing shareholder value. The assessment includes efficiency, market share, interest rates, inflation and economic growth as crucial criteria in comprehending the success of Islamic banks in each country. The secondary data is derived from the annual reports of 25 Islamic banks in Indonesia and Malaysia, with a focus on characteristics pertaining to operational efficiency and market share. Furthermore, data is obtained from Bank Indonesia (BI) to gather statistics regarding inflation, interest rates, and GDP growth from the years 2018 to 2021. The study used panel data regression with a random effects model as the most accurate estimator. The results of the panel data regression analysis suggest that inflation has a favorable effect on return on equity (ROE), while GDP growth has a beneficial impact on return on assets (ROA). This research highlights the importance of enhancing inflation risk management and making strategic adaptations to the business plans of Islamic banks in Malaysia and Indonesia. This research enhances the scholarly comprehension of the variables affecting the efficiency of Islamic banks in diverse economic conditions.

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Impacts of ownership structure on the financial performance of conventional and Islamic banks in the agency theory context

Cited by 7 publications

References 104 publications

State ownership and bank performance: conventional vs Islamic banks

State ownership and bank performance: conventional vs Islamic banks

Effect of Ownership on the Performance of Licensed Commercial Banks in Sri Lanka

A Cross-Country Analysis of Islamic Bank’s Performance in Malaysia and Indonesia

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