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Performance Evaluation of Islamic Banking Services Industry: Evidence from GCC

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  • Hanif, Muhammad

Abstract

This study documents the comparative financial performance of the Islamic Banking Services Industry (IBSI) in the Gulf Cooperation Council (GCC) region. After drawing the performance evaluation framework (based on the CAMEL framework), the research conducted data analysis of the Islamic Banking Services Industry (IBSI) in the GCC region for 31 quarters (2013Q4–2021Q4). The analysis examines capital adequacy, asset quality, management performance, earnings, and liquidity management. Objectively classified data trends are reported through graphs. Additionally, the research documents internal determinants of financial performance. Findings suggest that the GCC-IBSI has shown overall progress in achieving primary objectives (commercial performance), including healthy capital adequacy, cost control, equity returns, and liquidity management. Capital adequacy, cost control, and liquidity management significantly contribute to financial performance. Managerial implications include cost control, reduction in non-performing loans, and prudent liquidity management. There exist opportunities in the GCC-IBSI for investors, given the mismatch in demand and supply of Islamic financial services. This study contributes to the literature by documenting findings on the achievements of the primary objective of IBSI in multiple GCC-IBSI markets comparatively.

Suggested Citation

  • Hanif, Muhammad, 2024. "Performance Evaluation of Islamic Banking Services Industry: Evidence from GCC," OSF Preprints 379un_v1, Center for Open Science.
    • Handle: RePEc:osf:osfxxx:379un_v1
    DOI: 10.31219/osf.io/379un_v1
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    References listed on IDEAS

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    1. Imran Khokhar & Mehboob ul Hassan & Muhammad Nauman Khan & Md Fouad Bin Amin, 2020. "Investigating the Efficiency of GCC Banking Sector: An Empirical Comparison of Islamic and Conventional Banks," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 11(1), pages 220-235, January.
    2. repec:osf:osfxxx:e3pxd_v1 is not listed on IDEAS
    3. Abdus Samad, 2004. "Performance Of Interest-Free Islamic Banks Vis-À-Vis Interest-Based Conventional Banks Of Bahrain," IIUM Journal of Economics and Management, IIUM Journal of Economis and Management, vol. 12(2), December .
    4. Saiful Azhar Rosly & Mohd Afandi Abu Bakar, 2003. "Performance of Islamic and mainstream banks in Malaysia," International Journal of Social Economics, Emerald Group Publishing Limited, vol. 30(12), pages 1249-1265, December.
    5. Hanif, Muhammad & Farooqi, M Nauman, 2023. "Objective Performance Evaluation of The Islamic Banking Services Industry: Evidence from Pakistan," OSF Preprints e3pxd, Center for Open Science.
    6. Mona Esam Fayed, 2013. "Comparative Performance Study of Conventional and Islamic Banking in Egypt," Journal of Applied Finance & Banking, SCIENPRESS Ltd, vol. 3(2), pages 1-1.
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    Cited by:

    1. Birau Ramona & Filip Robert Dorin, 2025. "Islamic Finance Paradigm And Its Impact On The Banking System," Annals - Economy Series, Constantin Brancusi University, Faculty of Economics, vol. 1, pages 83-88, February.

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