Protection of Bank's Wealth: How is Islamic Banks's Financial Performance Affected by Asset Quality and Operational Efficiency

Ali, Muhammad Ahmar; Shuib, Mohd Sollehudin; Nor, Alias Mat

doi:10.13189/ujaf.2021.090420

Cited by 5 publications

(4 citation statements)

References 47 publications

Supporting

Mentioning

Contrasting

Unclassified

Order By: Relevance

“…The greater the value, the more stable the banking system is. In our study, we measure operating efficiency as proxied by the non-interest expense ratio suggested by Ali, Shuib and Nor (2021), Dutta and Saha (2021), Rahman et al (2021) and Supiyadi (2021) which is calculated as a non-interest expense to the total asset. So, we may claim that increased operational efficiency improves the financial sector's stability.…”

Section: Methodsmentioning

confidence: 99%

Bank stability, performance and efficiency: an experience from West Asian countries

Shahriar

Mehzabin

Ahmed

et al. 2022

IRJMS

View full text Add to dashboard Cite

PurposeThe banking sector in West Asia has always experienced positive growth except for Palestine. Apart from some negligible outlying outcomes in some countries that have faced political crises and war, most West Asian countries have gained bank profitability and efficiency. However, the stability in the banking sector has been rarely examined in the literature. Hence, this study sheds light on examining bank stability by considering 12 countries in West Asia.Design/methodology/approachA fixed effect panel data regression analysis is employed on strongly balanced panel data using data from 2004 to 2018.FindingsResults reveal that the net interest margin has a positive relationship with bank stability. The bank’s stability rises as the net interest margin improves. Furthermore, the non-interest income reveals a positive significant impact on the stability of banks, depicting that the increase in non-interest income increases the stability of banks. Additionally, the non-interest expense also reveals positive significant results with the stability of banks. Nevertheless, leverage ratio and long-term debt portray a negative significant impact on banks’ stability. The finding reveals that higher long-term debt and leverage ratios may decrease the stability of the banks in West Asia.Practical implicationsOverall, the authors’ findings add to the literature on the stability of the banks by providing some new but significant information. Some of the recommendations may be beneficial to the long-term success of 12 Western Asian countries’ banks.Originality/valueThe study examines the stability of banks by incorporating both profitability and operating efficiency along with net-interest income, which extends to the current literature’s insight.

show abstract

Section: Methodsmentioning

confidence: 99%

Bank stability, performance and efficiency: an experience from West Asian countries

Shahriar

Mehzabin

Ahmed

et al. 2022

IRJMS

View full text Add to dashboard Cite

show abstract

“…Kinerja Dalam mengoprasionalkan bisnis modal menjadi faktor utama pendukung. Dalam mengantisipasi adanya kerugian kecukupan modal diperlukan setiap perseroan [3]. Penilaian permodalan yaitu nilai pada kecukupan modal bank dalam mengcover risiko kini serta dijadikan antsipasi dimasa yang akan datang.…”

Section: Pendahuluanunclassified

Non Performing Loan Memoderasi Pengaruh Kualitas Aset, Likuiditas, Rentabilitas Pada Kecukupan Modal

Afriani,

Yuliarini,

Inayati

2023

ekobistek

View full text Add to dashboard Cite

This research aims to determine the influence of asset quality, liquidity and profitability on the capital adequacy ratio in multi-finance companies that have gone public and to determine the influence of asset quality, liquidity and profitability on the capital adequacy ratio with NPL as a moderating variable in multi-finance companies that have gone public. The location for this research is without visiting the location of the research object, but searching for financial report data by accessing the BEI website at http:// www.idx.co.id as well as on the website of every multi-finance company registered on the BEI for 2015-2021. All companies Multifinance companies on the IDX are the population used in this research in 2015-2021, with 19 companies, while the sample in this research was 15 companies with a research period of 7 years so that a sample of 105 samples was obtained. The results of this research show that asset quality has no significant effect on capital adequacy in multi-finance companies, Liquidity has a significant effect on capital adequacy in multi-finance companies, Profitability has no significant effect on capital adequacy, NPL moderates the effect of asset quality on capital adequacy in multi-finance companies, NPL moderates the influence of liquidity on capital adequacy in multi-finance companies, NPL does not moderate the effect of profitability on capital adequacy in multi-finance companies that go public.

show abstract

“…This has led to the growth of the most domestic market shares of Islamic banks all over the world, including Malaysia. Currently, Malaysian Islamic banks accumulated approximately USD195.6 billion of global Islamic banking assets in 2019 (Ali et al, 2021). The Islamic banking industry in Malaysia has been acknowledged as one of the international Islamic Financial Institutions (IFIs) ever since its financial performance began showing remarkable improvements year by year.…”

Section: Introductionmentioning

confidence: 99%

Zakat As a Corporate Social Responsibility: How Does It Affect the Financial Performance of Islamic Banks?

Ali¹,

Shuib²,

Nor³

2023

JJBA

View full text Add to dashboard Cite

Islamic banks should actively engage in Corporate Social Responsibility (CSR) activities as part of their moral obligations to contribute to society and surroundings. This study aims to investigate the influence of Zakat contribution, as a proxy of CSR, on the financial performance of Islamic banks in Malaysia. The study used panel-data analysis, whereby the annual reports of 11 local Islamic banks in Malaysia were analyzed over a ten-year period from 2010 to 2019. Fixed- and random-effect regression model analyses were conducted to analyze the results of the study. The findings reveal that there is a positive and significant relationship between Zakat contribution and the financial performance proxied by Return on Asset (ROA) and Return of Equity (ROE) of the Islamic banks in Malaysia. Hence, the findings of the study confirmed the importance of social elements, like Zakat, in the operations of Islamic banks, as well as in the banks’ performance.

show abstract

Protection of Bank's Wealth: How is Islamic Banks's Financial Performance Affected by Asset Quality and Operational Efficiency

Cited by 5 publications

References 47 publications

Bank stability, performance and efficiency: an experience from West Asian countries

Bank stability, performance and efficiency: an experience from West Asian countries

Non Performing Loan Memoderasi Pengaruh Kualitas Aset, Likuiditas, Rentabilitas Pada Kecukupan Modal

Zakat As a Corporate Social Responsibility: How Does It Affect the Financial Performance of Islamic Banks?

Contact Info

Product

Resources

About