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Bank‐specific and macroeconomic profitability determinants of Islamic banks

Author

Listed:
  • Omar Masood
  • Muhammad Ashraf

Abstract

Purpose - The purpose of this paper is to inspect whether bank‐specific and macro‐economic determinants influence Islamic banks' profitability in the selected countries of different regions. Design/methodology/approach - In order to achieve the study objective and to answer the question, the balanced panel data regression model has been used. Bank level data is used and this study examines the alternative measures ROA and ROE as a bank‐specific function and macro‐economic determinants. Findings - The study results signify that banks with larger assets size and with efficient management lead to greater return on assets. Originality/value - The paper shows that management efficiency regarding operating expenses positively and significantly affects the banks' profitability.

Suggested Citation

  • Omar Masood & Muhammad Ashraf, 2012. "Bank‐specific and macroeconomic profitability determinants of Islamic banks," Qualitative Research in Financial Markets, Emerald Group Publishing Limited, vol. 4(2/3), pages 255-268, August.
    • Handle: RePEc:eme:qrfmpp:v:4:y:2012:i:2/3:p:255-268
    DOI: 10.1108/17554171211252565
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    Citations

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    Cited by:

    1. Sayyed Sadaqat Hussain Shah & Ștefan Cristian Gherghina & Rui Miguel Dantas & Saliha Rafaqat & Anabela Batista Correia & Mário Nuno Mata, 2023. "The Impact of COVID-19 Pandemic on Islamic and Conventional Banks’ Profitability," Economies, MDPI, vol. 11(4), pages 1-17, March.
    2. Asima Siddique & Omar Masood & Kiran Javaria & Dinh Tran Ngoc Huy, 2020. "A comparative study of performance of commercial banks in ASIAN developing and developed countries," Insights into Regional Development, VsI Entrepreneurship and Sustainability Center, vol. 2(2), pages 580-591, June.
    3. Muhammad Yusuf Amin & Syed Imran Khan & Noor Hassan, 2019. "Does Banking Sector Development have any Association with Economic Growth and Interest Rates in Pakistan?," Global Economics Review, Humanity Only, vol. 4(1), pages 100-107, March.
    4. Agnieszka Wojcik-Mazur, 2017. "Effect of Structural Liquidity on Profitability of Polish Commercial Banks in 2009–2016," Problemy Zarzadzania, University of Warsaw, Faculty of Management, vol. 15(66), pages 53-63.
    5. Muhammad Ali & Chin-Hong Puah, 2018. "Does Bank Size and Funding Risk Effect Banks’ Stability? A Lesson from Pakistan," Global Business Review, International Management Institute, vol. 19(5), pages 1166-1186, October.
    6. Muhammad Haris & Yong Tan & Ali Malik & Qurat Ul Ain, 2020. "A Study on the Impact of Capitalization on the Profitability of Banks in Emerging Markets: A Case of Pakistan," JRFM, MDPI, vol. 13(9), pages 1-21, September.
    7. Unal, Huseyin & Masih, Mansur, 2017. "Discerning causal relationship between operational cost and bank profit for commercial banks: Turkish evidence with ARDL approach," MPRA Paper 86391, University Library of Munich, Germany.
    8. Muhammad Ali, Khalid M. Iraqi, Abdul Waheed Khan, 2019. "Impact of Oil Prices on Stock Market Performance: Evidence from Top Oil Importing Countries," Journal of Finance and Economics Research, Geist Science, Iqra University, Faculty of Business Administration, vol. 4(2), pages 1-14, October.
    9. Caturida Meiwanto Doktoralina & Fikki Mutarotun Nisha, 2020. "Mudharabah Deposits Among Conventional Bank Interest Rates, Profit-Sharing Rates, Liquidity and Inflation Rates," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 11(1), pages 25-33, January.
    10. Asima Siddique & Omar Masood & Kiran Javaria & Dinh Tran Ngoc Huy, 2020. "A comparative study of performance of commercial banks in ASIAN developing and developed countries," Post-Print hal-02919632, HAL.
    11. Santosh Kumar Das & Khushboo Uppal, 2021. "NPAs and profitability in Indian banks: an empirical analysis," Future Business Journal, Springer, vol. 7(1), pages 1-9, December.
    12. Okotori, Tonprebofa & Ayunku, Peter, 2020. "Banking Reforms and Deposit Money Banks Profitability in Nigeria," MPRA Paper 102389, University Library of Munich, Germany.
    13. Dolly Gaur & Dipti Ranjan Mohapatra, 2021. "Non-performing Assets and Profitability: Case of Indian Banking Sector," Vision, , vol. 25(2), pages 180-191, June.
    14. BOITAN, Iustina Alina, 2015. "Determinants Of Sustainable Banks’ Profitability. Evidence From Eu Countries," Studii Financiare (Financial Studies), Centre of Financial and Monetary Research "Victor Slavescu", vol. 19(1), pages 21-39.
    15. Muhammad Ali, 2016. "Bank Profitability and its Determinants in Pakistan: A Panel Data Analysis after Financial Crisis," Journal of Finance and Economics Research, Geist Science, Iqra University, Faculty of Business Administration, vol. 1(1), pages 1-14, March.
    16. Yanikkaya, Halit & Gumus, Nihat & Pabuccu, Yasar Ugur, 2018. "How profitability differs between conventional and Islamic banks: A dynamic panel data approach," Pacific-Basin Finance Journal, Elsevier, vol. 48(C), pages 99-111.
    17. Lutfi, & Suyatno,, 2019. "Determinants of Bank Efficiency: Evidence from Regional Development Banks," Jurnal Ekonomi Malaysia, Faculty of Economics and Business, Universiti Kebangsaan Malaysia, vol. 53(3), pages 59-74.
    18. Nosheen & Abdul Rashid, 2021. "Financial soundness of single versus dual banking system: explaining the role of Islamic banks," Portuguese Economic Journal, Springer;Instituto Superior de Economia e Gestao, vol. 20(1), pages 99-127, January.

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