Nonperforming loans in the GCC banking sectors: Does the Islamic finance matter?

Alandejani, Maha; Asutay, Mehmet

doi:10.1016/j.ribaf.2017.07.020

Cited by 58 publications

(45 citation statements)

References 45 publications

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“…The results of this study are in line with the research of Abusharbeh (2014), Ernawati (2016), and Mustafidah & Mukhibad (2018). This research results are different from the research of Alandejani & Asutay (2017) claimed that the increase of Islamic bank's NPF was caused by the increase of financing that generates fixed income higher than profit-sharing financing.…”

Section: Discussioncontrasting

confidence: 99%

“…While internal variables are used to predict NPF are CAR, NIM, FDR, and third-party fund (TPF) as used by Said & Ali (2016), Setiawan & Bagaskara (2016), Buchory (2017), and Laryea, Ntow-Gyamfi, & Alu, (2017) in their research. Meanwhile, Alandejani & Asutay (2017) and Mustafidah & Mukhibad (2018) used the type of financing and the GCG mechanism in predicting NPF. The novelty of this research is that the researcher used more comprehensive GCG measurement (as a complement to the GCG mechanism).…”

Section: |mentioning

confidence: 99%

“…Al-Wesabi & Ahmad (2013) and Anggraeni (2016) found that a high risk enlarged the NPF. However, Alandejani & Asutay (2017) pointed out that Islamic bank's NPF increased in line with increased financing that generates fixed Jurnal Keuangan dan Perbankan | BANKING Volume 22, Issue 3, July 2018: 506-517 | 510 | income higher than profit sharing financing. Therefore, the following hypothesis may be developed as follows:…”

Section: Financial Performance Determinant Of Islamic Banking In Indomentioning

confidence: 99%

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Financial Performance Determinant of Islamic Banking in Indonesia

Mukhibad

Khafid

2018

Jurnal Keuangan Dan Perbankan

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The rapid growth of Islamic banks also occured in Indonesia. The high growth of Islamic banks' assets gave opportunities to increase bad debt (non-performing financing). We examined the impact of good corporate governance (GCG), number of sharia supervisory board (SSB), financing to deposit ratio (FDR), profit and loss sharing (PLS) financing ratio, profit sharing rate of financing, and temporary syirkah fund ratio on the performance of non-performance financing (NPF) and return on assets (ROA). This research also tested the influence of NPF on ROA. The population of this research was Islamic commercial banks in Indonesia with the observation ranged from 2009-2016. The samples were determined by using a purposive sampling method. Data analysis used a structural equation model with WarpPLS. We proved that empirically GCG disclosure did not affect NPF. NPF bank was influenced by PLS financing and temporary syirkah fund ratio. PLS financing income and FDR financing did not affect the NPF. Moreover, GCG, SSB, temporary syirkah fund, and NPF disclosures influenced profitability AbstrakPesatnya pertumbuhan bank syariah juga terjadi di Indonesia. Pertumbuhan aset bank syariah yang tinggi memberikan peluang terjadinya peningkatan kredit macet (nonperforming financing). Kami menguji pengaruh Good Corporate Governance (GCG), jumlah dewan pengawas syariah (DPS), Financing to Deposit Ratio (FDR), rasio pembiayaan Profit and Loss Sharing (PLS), tingkat pendapatan bagi hasil pembiayaan, dan rasio dana syirkah temporer terhadap kinerja Non Perfomance Financing (NPF) dan Return On Assets (ROA). Selain itu, penelitian ini juga menguji pengaruh NPF terhadap ROA. Populasi penelitian adalah bank umum syariah di Indonesia dengan tingkat pengamatan dari tahun 2009-2016. Sampel ditentukan dengan metode purposive sampling. Analisis data yang digunakan adalah structural equation model dengan WarpPLS. Kami membuktikan secara empiris bahwa pengungkapan GCG tidak memengaruhi NPF. NPF bank dipengaruhi oleh PLS financing dan syirkah dana temporer ratio. Pendapatan dari pembiayaan PLS dan FDR tidak mempengaruhi NPF. Pengungkapan GCG, SSB, dana syirkah temporer dan NPF memengaruhi profitabilitas.

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Section: Discussioncontrasting

confidence: 99%

Section: |mentioning

confidence: 99%

Section: Financial Performance Determinant Of Islamic Banking In Indomentioning

confidence: 99%

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Financial Performance Determinant of Islamic Banking in Indonesia

Mukhibad

Khafid

2018

Jurnal Keuangan Dan Perbankan

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“…These results add further to the evidence documented by Abedifar et al (2016) and Meslier et al (2017) indicating that the presence of Islamic banks can favourably affect the banking sector and conventional banking through efficiency improvements and higher returns to depositors, respectively. However, they are not in line with Alandejani and Asutay (2017), who document higher credit-risk exposure with increasing presence of Islamic banks.…”

Section: Results and Analysis 41 Baseline Resultscontrasting

confidence: 71%

Islamic Banking and Bank Performance in Malaysia: An Empirical Analysis

Ibrahim

2020

JIMF

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This paper examines the performance of Malaysia’s banking sector and its relationship to the presence of Islamic banking in the country. More specifically, by controlling for the theoretically relevant determinants of bank performance we compare the efficiency, profitability and risk of Islamic banks to conventional banks and examine the spillover effects of Islamic banking penetration on bank performance. To these ends, we adopt a panel modelling approach. Taking note that our focal variables comprise the time-invariant Islamic banking dummy and potentially endogenous Islamic banking share, we apply the Hausman–Taylor (HT) instrumental-variable estimator in the analysis. Our results indicate that Islamic banks in Malaysia are less profitable than their conventional counterparts and that Islamic banking penetration is associated with lower bank profitability. However, the increasing presence of Islamic banking appears to make Malaysian banks less risky and, with limited evidence, more efficient. Finally, the efficiency–risk trade-off seems to have potential as the Islamic banking portion of the sector increases in size. These results are reasonably robust compared to alternative specifications of the model.

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“…A study by Alandejani and Asutay (2017) in the Gulf States found that particular sectors financed by sharia banks led to high loan risk. Because different sectors of finance affect the financing structure and have an impact on the long-term risk of sharia banking (Abdul-Rahman et al, 2017).…”

Section: Introductionmentioning

confidence: 99%

What is the Determinant of Non-Performing Financing in Branch Sharia Regional Bank in Indonesia

Damanhur

Albra

Syamni

et al. 2018

Proceedings of MICoMS 2017

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Purpose-The aim of this study is to analyze the effects of macro-and micro-economic variables on the ratio of troubled financing (Non-Performing Financing, NPF). Design/Methodology/Approach-The method used in this research is the data panel fixed effect with 13 banks and 4 periods of data report (semi-annual report 2014-2015). Findings-The regression result achieved that variable inflation significantly influences the ratio of NPF. Variable Gross Domestic Product and assets total significantly influence the ratio of NPF too. While the SBI sharia's variable and Financing to Deposit Ratio did not significantly affect NPF in Syariah's Unit of Aceh Bank Pembangunan Daerah (BPD) in Indonesia. Research Limitations/Implications-This study uses panel data which are a combination of time series data and cross-section. Practical Implications-The policymakers can design a macro-policy carefully and better fiscal policies.

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Nonperforming loans in the GCC banking sectors: Does the Islamic finance matter?

Cited by 58 publications

References 45 publications

Financial Performance Determinant of Islamic Banking in Indonesia

Financial Performance Determinant of Islamic Banking in Indonesia

Islamic Banking and Bank Performance in Malaysia: An Empirical Analysis

What is the Determinant of Non-Performing Financing in Branch Sharia Regional Bank in Indonesia

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