Measuring the Performance of Jordanian Islamic Banks

Abstract

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 ISSN 2161-7104 2017 utilize one measurement tool. Journal of Public Administration and Governance

The Impact of External Shari'ah Auditing on the Efficiency of Jordanian Islamic Banks Performance

“…The audit process include a structured, documented plan involving a series of steps beginning with planning the audit and ending with issued the external audit report as to make sure the financial statements are prepared in accordance with the fatwa guidelines were issued by the Shari'ah Supervisory Board (SSB), the accounting standards of the AAOIFI, and relevant national accounting standards and practices in the country in which auditor operates (Arwani, 2018). (Kurd, 2010) claimed that financial performance and efficiency have to be measured regularly, hence performance measurement is considered as a major requirement to maintain the growing and sustainability of the Islamic banks (Qasim, Mohamad and Ibrahim, 2017).…”

Measurement the Performance Levels of Islamic Banks in Jordan

“…a. The financial ratios analyses (FRA) will rank based on the mean of FRA with clarifying the nature of the relationship between performance and ratios (Qasim et al, 2017).…”

“…Bank's performance is important for all parties; depositors, bank managers, regulators, and competitive market (Qasim et al, 2017). The bank performance provides a signal to investors-depositor whether to withdraw funds from investment or withdraw funds from the bank.…”

“…In addition, one can utilize performance as a basis for comparison between the banks' services (Ajlouni & Moh'd, 2011). Qasim et al (2017) stated there are differences of viewpoints of the researcher, it can be concluded that the measure of financial performance consists of revenues, costs, and profits. An institution that is considered to be having a good performance is described as one that generates the highest value of revenues and pays lesser costs to achieve a higher percentage of profits.…”

Recent Development of Islamic Banking Performance Measurement

“…Some alternative models of measuring the performance of Islamic banks that develop can group as follows. First, Islamicity Index, Economic Contribution and Muslim Community, and Social Performance Index (Samad & Hasan, 2000;Hameed et al, 2004;Setiawan, 2009;Aisjah & Hadianto, 2013;Zainal & Putra, 2016;Mukhibad et al, 2017;Wiranata & Rama, 2018;Sabirin, 2018;Mutia et al, 2019); Second, Maqashid Index and Islamic Bank Maqashid Index (Mohamed et al, 2008;Mohamed & Taib, 2009, 2015Antonio et al, 2012;Hartono & Sobari, 2017;Asutay & Harningtyas, 2015;Ascarya et al, 2016;Qasim et al, 2017;Ascarya et al, 2017).…”