Islamic Bank Financial Performance Analysis: Influence and Causes
Keywords:
Performance; finance; Islamic bank; economic
Abstract
Analysis of the financial performance of Islamic banks is mostly done by experts. This analysis uses many models, such as liquidity. In addition to assessing the financial performance of the Islamic bank itself, this financial performance analysis also refers to its influence on other factors such as economic growth. By using a literature study, this article analysis what influences and is influenced by the financial performance of Islamic banks. This article finds that the financial performance of Islamic banks influences external factors such as economic growth and internal factors such as credit risk. This financial performance is also influenced by external factors, such as economic growth, and internal ones, such as CSR disclosure. The financial performance of Islamic banks is also used to compare it with the performance of conventional banks and fellow Islamic banks in different countries. Each researcher in the sampled article uses a different analytical method according to his research objectives. Islamic banks have a unique performance analysis method that does not exist in conventional banks, namely financing measurement using non-profit loss-sharing and profit loss-sharing schemes
References
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Marlina, L., & Sudana. (2020). Does the population number, the economic growth, and the inflation influence the growth of Islamic Bank in Indonesia? Journal of Critical Reviews, 7(5), 723–729. https://doi.org/10.31838/jcr.07.05.149
Marsha, N., & Murtaqi, I. (2017). the Effect of Financial Ratios on Firm Value in the Food and Beverage Sector of the Idx. Journal of Business and Management, 6(2), 214–226.
Mensi, W., Hammoudeh, S., Tiwari, A. K., & Al-Yahyaee, K. H. (2020). Impact of Islamic banking development and major macroeconomic variables on economic growth for Islamic countries: Evidence from panel smooth transition models. Economic Systems, 44(1). https://doi.org/10.1016/j.ecosys.2019.100739
Saleem, A., Sági, J., & Bárczi, J. (2021). Modes of Islamic fnancing and aggregate economic output: Evidence from Islamic banking industry of Pakistan. Economic Annals-XXI, 190(5), 109–118. https://doi.org/10.21003/EA.V190-10
Solarin, S. A., Hammoudeh, S., & Shahbaz, M. (2018). Influence of economic factors on disaggregated Islamic banking deposits: Evidence with structural breaks in Malaysia. Journal of International Financial Markets, Institutions and Money, 55, 13–28. https://doi.org/10.1016/j.intfin.2018.02.007
Sumarti, N., Hayati, M. M., Cahyani, N. L. P. A., Wahyudi, R. R., Tristanti, D. P., & Meylani, R. (2018). Has the growth of Islamic banking had impact to economic growth in Indonesia? 4th IEEE International Conference on Engineering Technologies and Applied Sciences, ICETAS 2017, 2018-Janua(June 2018), 1–6. https://doi.org/10.1109/ICETAS.2017.8277873
Ullah, A., Zhao, X., Kamal, M. A., Riaz, A., & Zheng, B. (2021). Exploring asymmetric relationship between Islamic banking development and economic growth in Pakistan: Fresh evidence from a non-linear ARDL approach. International Journal of Finance and Economics, 26(4), 6168–6187. https://doi.org/10.1002/ijfe.2115
Abdo, K. K. (2021). The effect of external economic variables on the conventional banks and Islamic banks financial performance in Jordan: a comparative study. Journal of Sustainable Finance and Investment. https://doi.org/10.1080/20430795.2021.1891785
Abdo, K., Qudah, H. Al, Zyadat, A., Al-makadmah, I., Manaseh, M. Al, AlQudah, M., & Aldmour, H. M. (2021). Impact Of Economic And Financial Determinants Affecting The Profitability Of Jordanian Islamic Banks (2012 -2019). Academy of Strategic Management Journal, 20, 1–10. https://api.elsevier.com/content/abstract/scopus_id/85109259749
Agustina, M., Abd. Majid, M. S., Musnadi, S., Faisal, F., Hafasnuddin, H., & Suriani, S. (2022). Islamic Banking, Economic Growth, and Poverty Reduction in Indonesia. 2022 International Conference on Decision Aid Sciences and Applications, DASA 2022, March, 1249–1253. https://doi.org/10.1109/DASA54658.2022.9765089
Alrawahdeh, S. T. A., & Zyadat, A. A. F. H. (2021). The role of the islamic banks in increasing domestic saving funding economic development in jordan. WSEAS Transactions on Business and Economics, 18, 905–915. https://doi.org/10.37394/23207.2021.18.86
Alshebel, A., Sikki, K. L., & Possumah, B. T. (2019). The impact of islamic banking credits on Saudi Arabia’s economic growth. International Journal of Innovation, Creativity and Change, 9(6), 1–24.
Azzam, A., & Rettab, B. (2022). Comparative tfp growth between gcc conventional and islamic banks before and after the 2008 financial crisis. Singapore Economic Review, 67(1), 289–308. https://doi.org/10.1142/S0217590820420047
Ben Bouheni, F., Obeid, H., & Margarint, E. (2022). Nonperforming loan of European Islamic banks over the economic cycle. Annals of Operations Research, 313(2), 773–808. https://doi.org/10.1007/s10479-021-04038-8
Biduri, S., Hariyanto, W., Hermawan, S., & Nindiyah, E. W. (2022). Islamic Financial Bank Performance in Indonesia and Malaysia. IQTISHODUNA: Jurnal Ekonomi Islam, 11(1), 111. https://doi.org/10.54471/iqtishoduna.v11i1.1491
Bilgin, M. H., Danisman, G. O., Demir, E., & Tarazi, A. (2021). Economic uncertainty and bank stability: Conventional vs. Islamic banking. Journal of Financial Stability, 56(July), 100911. https://doi.org/10.1016/j.jfs.2021.100911
Bornman, M., & Ramutumbu, P. (2019). A conceptual framework of tax knowledge. Meditari Accountancy Research, 27(6), 823–839. https://doi.org/10.1108/MEDAR-09-2018-0379
Ellili, N. O. D., & Nobanee, H. (2022). Impact of economic, environmental, and corporate social responsibility reporting on financial performance of UAE banks. Environment, Development and Sustainability. https://doi.org/10.1007/s10668-022-02225-6
Eti, S., Kalkavan, H., Dinçer, H., & Yüksel, S. (2019). Predicting the role of islamic banking on sustainable economic development: An analysis for Turkey with ARIMA Model. Handbook of Research on Creating Sustainable Value in the Global Economy, January, 146–164. https://doi.org/10.4018/978-1-7998-1196-1.ch009
Gulaliyev, M. G., Rahimov, E. N., Kashiyeva, F. S., Huseynova, A. T., Alijanova, S. M., & Hakimova, Y. A. (2021). The economic efficiency of traditional and Islamic banking (a comparative analysis of the Turkish, Azerbaijani, and Iranian banking sectors). Comparative Economic Research, 24(1), 141–157. https://doi.org/10.18778/1508-2008.24.08
Jan, A., Marimuthu, M., Bin Mohd Mat Isa, M. P., & Shad, M. K. (2019). Bankruptcy forecasting and economic sustainability profile of the market leading Islamic banking countries. International Journal of Asian Business and Information Management, 10(2), 73–90. https://doi.org/10.4018/IJABIM.2019040104
Khasanah, U., Tibrizi, A., & Wicaksono, S. (2021). Intermediary performance of Islamic banks in the disruption era: Does it contribute to economic growth? Banks and Bank Systems, 16(1), 103–115. https://doi.org/10.21511/bbs.16(1).2021.10
Ledhem, M. A., & Mekidiche, M. (2020). Economic growth and financial performance of Islamic banks: a CAMELS approach. Islamic Economic Studies, 28(1), 47–62. https://doi.org/10.1108/ies-05-2020-0016
M. Anwar, S., Junaidi, J., Salju, S., Wicaksono, R., & Mispiyanti, M. (2020). Islamic bank contribution to Indonesian economic growth. International Journal of Islamic and Middle Eastern Finance and Management, 13(3), 519–532. https://doi.org/10.1108/IMEFM-02-2018-0071
Marlina, L., & Sudana. (2020). Does the population number, the economic growth, and the inflation influence the growth of Islamic Bank in Indonesia? Journal of Critical Reviews, 7(5), 723–729. https://doi.org/10.31838/jcr.07.05.149
Marsha, N., & Murtaqi, I. (2017). the Effect of Financial Ratios on Firm Value in the Food and Beverage Sector of the Idx. Journal of Business and Management, 6(2), 214–226.
Mensi, W., Hammoudeh, S., Tiwari, A. K., & Al-Yahyaee, K. H. (2020). Impact of Islamic banking development and major macroeconomic variables on economic growth for Islamic countries: Evidence from panel smooth transition models. Economic Systems, 44(1). https://doi.org/10.1016/j.ecosys.2019.100739
Saleem, A., Sági, J., & Bárczi, J. (2021). Modes of Islamic fnancing and aggregate economic output: Evidence from Islamic banking industry of Pakistan. Economic Annals-XXI, 190(5), 109–118. https://doi.org/10.21003/EA.V190-10
Solarin, S. A., Hammoudeh, S., & Shahbaz, M. (2018). Influence of economic factors on disaggregated Islamic banking deposits: Evidence with structural breaks in Malaysia. Journal of International Financial Markets, Institutions and Money, 55, 13–28. https://doi.org/10.1016/j.intfin.2018.02.007
Sumarti, N., Hayati, M. M., Cahyani, N. L. P. A., Wahyudi, R. R., Tristanti, D. P., & Meylani, R. (2018). Has the growth of Islamic banking had impact to economic growth in Indonesia? 4th IEEE International Conference on Engineering Technologies and Applied Sciences, ICETAS 2017, 2018-Janua(June 2018), 1–6. https://doi.org/10.1109/ICETAS.2017.8277873
Ullah, A., Zhao, X., Kamal, M. A., Riaz, A., & Zheng, B. (2021). Exploring asymmetric relationship between Islamic banking development and economic growth in Pakistan: Fresh evidence from a non-linear ARDL approach. International Journal of Finance and Economics, 26(4), 6168–6187. https://doi.org/10.1002/ijfe.2115
Published
2024-05-27
Section
Articles
Copyright (c) 2024 Muhammad Rifky Santoso
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
