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The Impact of Internal Variables on the Islamic Banks and Conventional Banks Financial Performance in Jordan: A Comparative Study

Author

Listed:
  • Khawla K. Abdo

    (Department of Finance and Banking, Al-Balqa Applied University, Alsalt, Jordan)

Abstract

The aim of this study is to explain the effect of the external variables on the financial performance of the Islamic and conventional banks measured by the rates of return of assets and the rates of return on equity, in addition to the earnings per stock during the period (2001-2011). To achieve the objectives of the study, some statistical procedures and E-views program are used. The data of the annual financial reports from the sample of the study are collected. The findings of the study indicated a statistical significant effect of the external variables on the performance of the conventional banks. According to Islamic banks, there was an effect of the external variables, on the financial performance. In addition, the findings showed that there were statistical significant differences in the rates of returns on assets between Islamic and conventional banks, but there were no significant statistical differences with respect to rates of return on equity, and the earnings per stock between the two kinds of banks. In light of these findings, the study has come up with some recommendations. The Islamic banks have to enhance their financial performance to be distinguished and to progress their activities.

Suggested Citation

  • Khawla K. Abdo, 2020. "The Impact of Internal Variables on the Islamic Banks and Conventional Banks Financial Performance in Jordan: A Comparative Study," International Journal of Economics and Financial Issues, International Journal of Economics and Financial Issues, vol. 10(6), pages 222-231.
    • Handle: RePEc:eco:journ1:2020-06-26
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    References listed on IDEAS

    as
    1. Sailesh Tanna & Kyriaki Kosmidou & Fotios Pasiouras, 2005. "Determinants of profitability of domestic UK commercial banks: panel evidence from the period 1995-2002," Money Macro and Finance (MMF) Research Group Conference 2005 45, Money Macro and Finance Research Group.
    2. Ahmad Aref Almazari, 2014. "Impact of Internal Factors on Bank Profitability: Comparative Study between Saudi Arabia and Jordan," Journal of Applied Finance & Banking, SCIENPRESS Ltd, vol. 4(1), pages 1-7.
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    Keywords

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    JEL classification:

    • G2 - Financial Economics - - Financial Institutions and Services
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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