The Impact of the Financial Crisis on the Islamic Banks Profitability - Evidence from GCC

Almanaseer, Mousa

doi:10.5430/ijfr.v5n3p176

Cited by 20 publications

(16 citation statements)

References 28 publications

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“…Panel (A) presents the pooled model, while panel (B) presents the Seemingly Unrelated Regression (SUR) (or Zellner method) 4 .…”

Section: Resultsmentioning

confidence: 99%

“…However, the effect clearly differs significantly between the two banking forms. Almanaseer (2014) analyzes the effects of the 2008 subprime crisis on the GCC Islamic banks. He reached the conclusion of no effect of the crisis on the profitability of the GCC Islamic banks due to the profit sharing systems mechanism, which allows Islamic banks to keep their net worth and avoid deterioration under difficult economic situation.…”

Section: Literature Review and Hypotheses Developmentmentioning

confidence: 99%

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Performance differences between Islamic and conventional banking forms

Alshammari

2017

Banks and Bank Systems

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AUTHORSTurki Alshammari ARTICLE INFOTurki Alshammari (2017 AbstractThis paper strives to recognize the possible performance differences between the two popular banking forms in the Gulf Cooperation Council (GCC) countries. Applying different methodologies on the data that span the period 2003-2015, this study documents significant differences with respect to the period, countries, and performance measures. Specifically, conventional banks in GCC countries outperform their Islamic counterparts in profitability. Also, bank specific factors such as liquidity, capital adequacy, bank size and growth all affect the profitability. In addition, GCC conventional and Islamic banks were isolated from the 2008 subprime crisis even though their profitability seems to be decayed differently over the period of the economic downturn.

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“…Panel (A) presents the pooled model, while panel (B) presents the Seemingly Unrelated Regression (SUR) (or Zellner method) 4 .…”

Section: Resultsmentioning

confidence: 99%

Section: Literature Review and Hypotheses Developmentmentioning

confidence: 99%

Performance differences between Islamic and conventional banking forms

Alshammari

2017

Banks and Bank Systems

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“…We also find several studies that examine the impact of GDP growth on Islamic banks' behaviour. For instance, Bashir (2003), Hassan and Bashir (2003), Zeitun (2012) and Almanaseer (2014) documented that a favourable macroeconomic environment stimulates higher profitability of Islamic banks. Masood and Ashraf (2012) showed that the loan losses provision of Islamic banks is lower than that of conventional banks, and GDP growth contributes negatively to the bank's profitability.…”

Section: Literature Reviewmentioning

confidence: 99%

Business orientation, efficiency, and credit quality across business cycle: Islamic versus conventional banking. Are there any lessons for Europe and Baltic States?

Nosheen

Rashid

2019

Baltic Journal of Economics

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This paper empirically investigates the difference between Islamic and conventional banks in terms of business dynamics, cost structure, credit quality, and stability. It also examines the difference in the response of two types of banks during peak and trough phases of the business cycle. The analysis is carried out for a sample of 280 banks in 20 countries over the 1995-2014 period. The results reveal that Islamic banks are more involved in fee-based business, are less cost-efficient, have higher credit quality, and have higher capitalization than conventional banks. We also find that Islamic banks outperformed conventional banks with regard to their credit quality and stability indicators during the trough phase of the business cycle. The improved performance seems to be due to the differences in the provisioning strategies of the two types of banks, the non-aggressive lending profile of Islamic banks, and investment in real assets. Finally, based on the empirical findings, the paper also highlights potential lessons that conventional banks in Baltic States, which were severely hit by the 2007-2008 global financial crisis, can draw from Islamic banking principles.

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“…In fact size of the banks and equity capital increases the profitability of the Islamic banks and because of increase in the equity capital, expenses of the Islamic bank's decreases and profitability of the Islamic bank's increases [14]. [15] checked the impact of the financial crises at the both banking streams of Islamic and conventional of Qatar's banks and found that Islamic banks management of assets, deposits is better than the conventional banks and Islamic banks were less liquid than the conventional.…”

Section: Literature Reviewmentioning

confidence: 99%

The Effect of Financial Variables on Bank Performance Pre and Post Financial Crisis

Saddique¹,

Ahmad²,

Mumtaz³

et al. 2016

JFA

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Abstract:This study endeavored to find out the effect of financial variables on bank performance pre and post financial crisis of 2008 in Pakistan. Using regression analysis the study revealed that financial crises of 2008 posed a significant influence on the performance of conventional and Islamic banks in Pakistan and pronounced a negative relationship between financial crises and bank performance. The Capital adequacy, assets quality, management quality, liquidity quality, earning quality and bank size posed a negative influence on bank performance during crises while NIM / NNIM showed no effect. Furthermore, Islamic banks affected far less as compared to conventional banks.

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The Impact of the Financial Crisis on the Islamic Banks Profitability - Evidence from GCC

Cited by 20 publications

References 28 publications

Performance differences between Islamic and conventional banking forms

Performance differences between Islamic and conventional banking forms

Business orientation, efficiency, and credit quality across business cycle: Islamic versus conventional banking. Are there any lessons for Europe and Baltic States?

The Effect of Financial Variables on Bank Performance Pre and Post Financial Crisis

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